Nashville, TN Short-Term Rental Investor Guide

Overview: Short-term rentals are permitted in Nashville and Davidson County, TN, provided the operator obtains a Short-Term Rental Property (STRP) permit from the Metro Codes Department before listing on platforms like Airbnb. The city offers two distinct permit types with different eligibility and operational requirements, and imposes specific regulations, taxes, and fees. Investors must be aware of zoning restrictions, especially for non-owner occupied permits, which are significantly limited to non-residentially zoned areas.

1. How to Start a Short-Term Rental Business in Nashville

1. Determine Eligibility and Zoning: The first critical step is identifying your property's zoning district. This dictates which type of permit (if any) you are eligible for.

   • Owner-Occupied Permits: Are allowed as an accessory use in most zoning districts that permit residential use (excluding NS districts). In single-family and two-family districts, only one permit is allowed per lot.
   • Non-Owner Occupied Permits: Are highly restricted. New permits are only permitted in specific non-residential zoning districts listed in the District Land Use Table. These include MUN, MUL, MUG, MUI, OG, OR20-OR40, ORI, CN, CL, CS, CA, CF, and DTC (North, South, West, Central), SCN, SCC, SCR districts. They are prohibited in residential districts (AR2A, R, RS, RM).
   • Consult Zoning: Use the District Land Use Table to confirm your property's zoning and permitted uses. A zoning examination may be necessary for definitive confirmation.

2. Select and Apply for the Appropriate Permit: Choose between an Owner-Occupied or Non-Owner Occupied STRP permit. Applications are submitted online through the Nashville Codes Department website. The process generally involves completing the online application and uploading required documentation (see Section 2 below).

3. Pay Fees and Await Processing: The permit fee is $313 (non-refundable). Processing times may vary.

4. Prepare for Operation: Once the permit is issued, ensure the property complies with all operational requirements (see Section 4 below). Plan for tax registration and remittance (see Section 5 below).

5. Annual Renewal: Permits are valid for 365 days and must be renewed annually before expiration. Late renewal or operation under an expired permit can result in a one-year prohibition from obtaining a new permit.

2. Required Documents, Permits, Licenses, and Guidelines

• STRP Permit Application: Submitted online via the Codes Department portal.
• Proof of Payment of All Due Taxes: Demonstrating up-to-date status with all relevant tax authorities.
• Certified Floor Plan: Of the entire dwelling including all rooms with walls, doors, windows, and the location of smoke detectors.
• Insurance Proof: Homeowner's fire, hazard, and liability insurance for at least $1 million per occurrence.
• Notarized Affidavit: Confirming all provided information is true and accurate (often a specific city form).
• Proof of Notification of Adjacent Property Owners: Required for the application process.
• HOA/Condo Agreement Statement: A statement that operating the STRP does not violate any HOA, condominium, or other applicable covenants, codes, and restrictions (CC&Rs).
• Two Forms of Identification: Showing proof of residence.
• Fire Marshal Inspection (for Multi-Family Structures): Initiation of the inspection is required for properties with 3 or more dwellings.
• Non-Owner Occupied Requirements: Additional documentation specific to non-owner occupied permits, including the non-conveyance ownership summary, is required. Investors must be aware that any change in ownership (e.g., from an individual to an LLC) will cancel the permit.
• Business Licenses: While not explicitly listed on the permit application checklist, state-level regulations and practical requirements necessitate obtaining both a Metro Nashville Business License and a Davidson County Business License before operating.
• Fees: The primary permit fee is $313. Annual renewal fees apply.

Guidelines: Operators must adhere to the rules outlined in Section 4 below and relevant state and local building and fire safety codes.

3. Specific Regulations for Short-Term Rentals in Nashville and Davidson County

The operation of an STRP is governed by strict rules. Violations can lead to permit revocation and a one-year prohibition from reapplying. Key regulations include:

• Signage: All signs on the property must comply with Title 17, Chapter 32 of the Metro Code (MCO 17.32).
• Noise and Waste: All occupants must abide by applicable noise restrictions and waste management provisions. The permit holder is responsible for guest activity.
• Safety Compliance: The property must meet all applicable state and local building and fire safety codes. Requirements include smoke alarms and carbon monoxide detectors.
• Vehicle/Trailer Restrictions: No recreational vehicles, buses, or trailers shall be visible on the street or on the property in conjunction with the STRP use.
• Food Service: No food shall be prepared for or served to guests by the permit holder or manager.
• Age Requirement: The principal renter must be at least 21 years of age.
• Occupancy Limits: The maximum number of occupants is twice the number of permitted sleeping rooms plus four (with a maximum of 12). Simultaneous rental to more than one party under separate contracts is prohibited.
• Minimum Stay: The permit holder shall not receive compensation for a period of less than 24 hours.
• Tax Responsibility: The permit holder is responsible for collecting and remitting all applicable room, occupancy, and sales taxes.
• Local Responsible Party: The name and telephone number of a local responsible party must be conspicuously posted within the unit. This party must answer calls 24/7 during each rental period to address problems.
• Permit Non-Transferability: Permits cannot be transferred or assigned to another individual, entity, or address. Only the named permit holder may operate the STRP. A change in ownership cancels the permit.
• Revocation: The permit may be revoked upon determination of three violations of any applicable ordinance or law.
• Permit Expiration: The permit expires 365 days after issuance unless renewed prior to its expiration.

4. Tax Responsibilities

STRP operators have significant tax obligations:

1. Hotel/Motel (Room) Occupancy Tax: Nashville imposes a 7% Hotel Occupancy Tax on the rental charge, plus a $2.50 nightly fee. This tax must be collected by the operator and remitted to the Metro Treasurer's Office. Airbnb collects and remits this tax on behalf of hosts who list on their platform for bookings within the state of Tennessee.
2. Sales Tax: Operators must collect and remit Tennessee state sales tax (7%) and local sales tax (currently 2.25%, making the combined rate 9.25%) on the rental charge. This is handled through registration with the Tennessee Department of Revenue.
3. Business Tax: A business tax registration (gross receipts tax) is required with both the state (via the Department of Revenue) and the local Metro Nashville/Davidson County.

Action Required: Operators must register with the Metro Nashville Office of the Treasurer and the Tennessee Department of Revenue to set up the necessary accounts for tax collection and remittance.

5. Contact Information

• Metro Codes Department (STRP Permits):
  • Email: strpquestions@nashville.gov
  • Online: Nashville.gov - Short Term Rentals
  • For general Metro services: Call 311 or (615) 862-5000.
• Reporting Violations: Violations (including illegal STRP operations, noise, parking, trash) should be reported through the hubNashville portal.
• Short-Term Rental Appeals Board: For information on the appeals process, including dates and deadlines, consult the dedicated page on the Nashville.gov website.

Important Links to Source Pages

1. Nashville Codes Department - Short Term Rentals (Main Page): https://www.nashville.gov/departments/codes/short-term-rentals
2. Nashville Codes Department - Operation Requirements: https://www.nashville.gov/departments/codes/short-term-rentals/operation-requirements
3. Nashville Codes Department - Applying for a Permit: https://www.nashville.gov/departments/codes/short-term-rentals/apply-short-term-rental-property-permit
4. Nashville Codes Department - Permit Types (Owner-Occupied vs. Non-Owner Occupied): https://www.nashville.gov/departments/codes/short-term-rentals/permit-types
5. Nashville Metro Code of Ordinances - Section 6.28.030 (STRP Definition and Permits): https://library.municode.com/tn/metro_government_of_nashville_and_davidson_county/codes/code_of_ordinances?nodeId=CD_TIT6BULIRE_DIVIGERE_CH6.28HORO_6.28.030SHTEREPRPE
6. Nashville Metro Code of Ordinances - District Land Use Table: https://library.municode.com/tn/metro_government_of_nashville_and_davidson_county/codes/code_of_ordinances?nodeId=CD_TIT17ZO_CH17.08ZODILAUS_17.08.030DILAUSTA
7. Metro Nashville Office of the Treasurer - Hotel Occupancy Tax Information: https://www.nashville.gov/departments/finance/office-treasurer/collections/pay-hotel-occupancy-privilege-tax
8. State-Level Information (General Tennessee STR Laws): https://www.gosummer.com/post/tennessee-short-term-rental-laws (Use for state insurance requirements and general overview)