Overview: Are Short-Term Rentals Allowed in Lexington, VA?

YES, short-term rentals are allowed in Lexington, Virginia, but with significant restrictions. Lexington operates under Rockbridge County zoning regulations, which impose strict limitations based on property zoning classification and rental type. The regulatory environment is complex and varies significantly between residential, agricultural, and business zoning districts.

Key Restriction for Investors: Whole-house short-term rentals are prohibited in all residential zoning districts within Rockbridge County/Lexington. This is a critical limitation for investment strategies focused on entire home rentals.

How to Start a Short-Term Rental Business in Lexington, VA

Starting an STR business in Lexington requires navigating county zoning regulations, obtaining proper permits, and ensuring compliance with multiple regulatory bodies. The process differs substantially based on your property's zoning classification and intended rental type.

Step 1: Zoning Classification Assessment

Critical First Step: Determine your property's zoning classification before proceeding with any plans. Contact the Office of Community Development to confirm zoning classification, as this directly determines what type of STR operations are legally permissible.

Zoning Districts and Permitted STR Types:

Residential Districts (R-1, R-2):

• Whole-house rentals: NOT permitted
• Partial rentals: Only allowed through special exception as Bed & Breakfast Homestay
• Investment Strategy Implication: Traditional whole-home Airbnb operations are prohibited

Agricultural Districts (A-1, A-2, A-T):

• Whole-house rentals: Permitted as Tourist Home
• Partial rentals: Permitted as Bed & Breakfast Homestay, Bed & Breakfast Inn, or Tourist Home
• Enhanced options: Country Inn, Lodge, or Resort available through special exception

Business Districts (B-1, B-2):

• Whole-house rentals: Permitted as Tourist Home
• Partial rentals: Permitted as Bed & Breakfast Homestay, Bed & Breakfast Inn, Country Inn, or Tourist Home
• Note: B-2 district requires special exception permits for all STR types

Step 2: Define Your STR Business Model

Based on zoning restrictions, select from these legally defined STR types:

Bed & Breakfast Homestay:

• Owner-occupied residence
• 1-3 guest rooms maximum
• Breakfast service included
• Supplemental income source (not primary)
• No property signage typically displayed

Bed & Breakfast Inn:

• Private home primarily used for lodging
• Owner may live on-premises
• Property signage displayed
• Direct booking encouraged
• Major income source

Country Inn:

• Property primarily used for lodging
• Restaurant operation on-premises
• Meals served to guests and general public
• Owners may or may not live on-premises

Tourist Home:

• Lodging-only services
• Up to 5 bedrooms permitted
• No meal service required

Step 3: Permit Application Process

For Residential Districts: Apply for Special Exception Use Permit through the Office of Community Development.

For Agricultural and Business Districts: Standard permitted use application process (special exception may still be required for certain operations like Country Inns).

Required Documents, Permits, Licenses, and Guidelines

Mandatory Registrations and Licenses

1. Short-Term Rental Registry Registration

• Required for: All STR operators
• Registration Authority: Commissioner of the Revenue
• Purpose: Official listing in county STR registry
• Timeline: Must be completed before operation begins

2. Rockbridge County Business License

• Required for: STR owners as determined by Commissioner of the Revenue
• Application: Through Commissioner of the Revenue office
• Note: Not all STR operations may require this license; contact office for determination

Permitting Requirements by Zoning District

Residential Districts (R-1, R-2):

• Special Exception Use Permit (required for all STR operations)
• Application through Office of Community Development
• Public hearing process required
• Approval subject to zoning compliance review

Agricultural Districts (A-1, A-2, A-T):

• Standard permitting process for permitted uses
• Special Exception required for Country Inn, Lodge, or Resort operations
• Building permits may be required for structural modifications

Business Districts (B-1, B-2):

• Standard permitting for B-1 district permitted uses
• Special Exception required for all STR types in B-2 district
• Enhanced compliance requirements due to business zoning

Documentation Requirements

• Property deed or lease agreement
• Site plan showing property boundaries and structures
• Floor plans identifying rental areas
• Proof of property insurance
• Owner identification and contact information
• Emergency contact information for property manager (if applicable)

Specific Regulations for Short-Term Rentals

Zoning Compliance by District

Residential Zoning Districts (R-1, R-2):

• Prohibition: Whole-house short-term rentals completely prohibited
• Permitted Use: Non-whole-house rentals only as Bed & Breakfast Homestay through special exception
• Investment Limitation: Traditional entire home Airbnb operations not viable
• Strategy Required: Focus on shared occupancy models or consider alternative zoning

Agricultural Zoning Districts (A-1, A-2, A-T):

• Whole-House Rentals: Permitted as Tourist Home classification
• Partial Rentals: Multiple options available (Homestay, Inn, Tourist Home)
• Enhanced Operations: Country Inn, Lodge, Resort through special exception
• Investment Opportunity: Most flexible zoning for STR operations

Business Zoning Districts (B-1, B-2):

• B-1 District: Permitted uses include Homestay, Inn, Country Inn, Tourist Home
• B-2 District: All STR operations require special exception approval
• Commercial Considerations: Higher regulatory oversight due to business zoning

Operational Restrictions

• Minimum Stay: Less than 30 consecutive days (definition threshold)
• Meal Service: Required for Homestay and Inn classifications; optional for Tourist Home
• Signage: Restricted based on STR type and zoning district
• Occupancy: Limits determined by building codes and zoning regulations
• Parking: Must comply with zoning district parking requirements

Building and Safety Compliance

• All STR properties must meet Virginia Uniform Statewide Building Code requirements
• Life safety systems must be maintained and accessible
• Emergency egress requirements must be satisfied
• Accessibility compliance may be required depending on property modifications

State-Level Regulations (Virginia)

Virginia state law provides the foundational framework for local STR regulations:

State Tax Obligations

• Transient Occupancy Tax: Collected and remitted per state requirements
• Sales Tax: Applicable to STR operations per Virginia law
• Income Tax: STR income subject to federal and state income tax reporting

State Building and Safety Codes

• Virginia Uniform Statewide Building Code applies to all STR properties
• State fire safety regulations for transient lodging
• Americans with Disabilities Act compliance for public accommodations

State Business Licensing

• Virginia business registration may be required depending on operation structure
• State professional licensing not specifically required for STR operations
• Workers' compensation requirements if employees are hired

Contact Information for Local Authorities

Primary Regulatory Agencies

Rockbridge County Office of Community Development

• Address: County Admin. Building, 150 Main St., Lexington, VA 24450
• Phone: 540-464-9662
• Email: cslaydon@rockbridgecountyva.gov
• Role: Zoning compliance, special exception permits, planning coordination
• Hours: Monday-Friday, 8:00 AM - 5:00 PM

Rockbridge County Commissioner of the Revenue

• Address: 150 South Main St., Lexington, VA 24450
• Phone: 540-463-3431
• Role: STR registry registration, business license determination
• Services: Property tax assessment, business licensing

City of Lexington Contacts

Planning and Development Department

• Director: Arne Glaeser
• Email: aglaeser@lexingtonva.gov
• Address: 300 E. Washington St., Lexington, VA 24450
• Phone: 540-462-3704
• Fax: 540-463-5310
• Hours: Monday-Friday, 8:00 AM - 5:00 PM

Lexington City Hall

• Main Phone: 540-462-3700
• Address: 300 E. Washington St., Lexington, VA 24450
• Website: www.lexingtonva.gov

Links to Source Pages

Rockbridge County Short-Term Rental Zoning Regulations (October 20, 2021):

• www.co.rockbridge.va.us/DocumentCenter/View/2517/Short-Term-Zoning-Regulations--20OCT21

Lexington Planning and Development Department:

• www.lexingtonva.gov/government/departments/planning-and-development

Lexington Short-Term Rental Fact Sheet:

• www.lexingtonva.gov/home/showpublisheddocument/2420/638676874645300000

Lexington Short-Term Rental Application:

• www.lexingtonva.gov/home/showpublisheddocument/2293/638320313328570000

Lexington Zoning Ordinance (March 20, 2025):

• www.lexingtonva.gov/home/showpublisheddocument/2800/638781632474600000

Lexington Zoning Map (October 5, 2017):

• www.lexingtonva.gov/home/showpublisheddocument/2238/637903812361700000

Lexington Zoning Land Use Matrix (March 20, 2025):

• www.lexingtonva.gov/home/showpublisheddocument/2532/638781638793900000

Investment Strategy Implications and Recommendations

Market Viability Assessment

For Traditional Whole-Home Rentals: Limited to agricultural and business zoned properties, significantly constraining investment opportunities in primarily residential areas.

For Shared Occupancy Models: Viable option in residential districts through Bed & Breakfast Homestay classification, but requires owner presence and operational model adjustment.

For Agricultural Properties: Most promising investment category with multiple STR type options and whole-house rental permissions.

Regulatory Compliance Strategy

1. Due Diligence Priority: Confirm exact zoning classification before property acquisition
2. Legal Structure: Consider business entity formation for STR operations
3. Insurance Review: Ensure adequate coverage for chosen STR classification
4. Professional Consultation: Engage local planning and legal professionals familiar with Rockbridge County regulations

Market Entry Recommendations

• Focus investment search on agricultural zoned properties for maximum STR flexibility
• Consider transitioning existing residential STRs to compliant models or alternative uses
• Develop relationships with local planning officials early in the process
• Budget additional time and costs for special exception permit processes where required

The regulatory environment in Lexington, VA requires careful navigation, but viable STR opportunities exist, particularly for properties outside residential zoning districts. Success depends on thorough pre-acquisition due diligence and alignment of business models with local zoning restrictions.