Chattanooga Short-Term Rental Regulations

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Permit & Licensing

Short-Term Vacation Rental Certificate - Homestay

The property must be your primary residence. This means investment properties are not eligible for this permit type.

Short-Term Vacation Rental Certificate - Absentee

This permit type does not require primary residence. Zoning restriction: Only allowed in mixed-use/commercial zones that allow a hotel (C-C, C-R, C-MU1, C-MU2, CC, IX, RF, RV, SH, CX), or within any parcel of at least 20 acres with common ownership that allows residential uses. Not permitted on Affordable Housing PILOT Program property.

Application Process

Apply online through the City's Open Gov portal and attach: valid State ID showing the property address; proof of ownership (stamped/filed warranty deed or Tax Assessor property card); proof of insurance (declaration page); a City of Chattanooga business license; site/floor plan; an Emergency Escape Plan; a photo of the posted EEP; secondary proof of primary residence (W-2, 1099, 1065, or vehicle registration); and proof of agency if the applicant lives more than 2 hours away. Pay the $250 fee. Incomplete applications have a 60-day lifetime; processing generally takes about 30 days.

Note: Document requirements vary by permit type. See individual permit sections above for eligibility details.

Tax Obligations

Combined rate: 17.25% of gross rental income.

Collection: The short-term vacation rental certificate holder is responsible for collecting and remitting all applicable room, occupancy, and sales taxes required by state law and the Chattanooga City Code. Since January 1, 2021, short-term rental unit marketplaces (e.g. Airbnb) that rent residential dwellings for less than 30 continuous days must remit the local occupancy tax to the Tennessee Department of Revenue, unless they have a contract with the local government to remit directly to it.

Rental Limits

Chattanooga does not impose an annual cap on the number of nights you can rent.

Occupancy & Density Limits

Maximum 5 bedrooms per dwelling unit. Maximum occupancy is two persons per bedroom up to 210 sq ft plus two additional persons; for bedrooms over 210 sq ft the load is the room area divided by 70 sq ft plus two additional persons. The maximum must be conspicuously posted in the unit.

Zoning & Restrictions

Homestay STVRs are allowed in any residential zone within the Short-Term Vacation Rental Overlay District and in mixed-use/commercial zones allowing residential use. Absentee (non-owner-occupied) STVRs are only allowed in mixed-use/commercial zones that permit a hotel (C-C, C-R, C-MU1, C-MU2, CC, IX, RF, RV, SH, CX) or on a parcel of 20+ acres with common ownership allowing residential use. Not permitted on Affordable Housing PILOT property; a unit may not occupy both a primary and accessory dwelling on one lot; STVRs may not exceed 25% of units in multi-unit dwellings.

Insurance & Safety

Insurance

Liability insurance is required for the property's use as a short-term rental, though the required coverage amount is not publicly specified.

Safety & Operating Requirements

• Functioning smoke detectors as determined by the Fire Marshal, plus other life safety equipment required by local, state, and federal law
• Site/floor plan showing smoke/CO detector locations, overall layout/exits, and parking location
• Emergency Escape Plan showing methods of egress in RED from each room/floor of the unit
• A printed (8x11) photo of the Emergency Escape Plan posted and mounted on each floor of the rental
• A legible copy of the short-term vacation rental certificate must be posted within the unit (required as of January 1, 2026)
• Unit must meet all applicable zoning, building, health, and life safety codes; cannot use uninhabitable structures (garages, barns, sheds)

Penalties for Non-Compliance

False statements in an application are grounds for denial, revocation or suspension, and/or imposition of penalties including denial of future applications. The City may revoke a certificate after three documented violations of City Code or State Law from operation of the STVR (after a public hearing and once no appeal rights remain). A revoked certificate bars the holder from applying for a new certificate on the same property for one year from revocation. An absentee certificate cannot be sought for 18 months after a rezoning to a zone that allows absentee STVRs.

Compliance Checklist

Follow these steps to legally operate a short-term rental in Chattanooga:

1. Determine your permit type. Chattanooga has 2 permit types. Identify which applies to your property (Short-Term Vacation Rental Certificate - Homestay, Short-Term Vacation Rental Certificate - Absentee).
2. Meet safety requirements. Functioning smoke detectors as determined by the Fire Marshal, plus other life safety equipment required by local, state, and federal law. Site/floor plan showing smoke/CO detector locations, overall layout/exits, and parking location. Emergency Escape Plan showing methods of egress in RED from each room/floor of the unit. A printed (8x11) photo of the Emergency Escape Plan posted and mounted on each floor of the rental. A legible copy of the short-term vacation rental certificate must be posted within the unit (required as of January 1, 2026). Unit must meet all applicable zoning, building, health, and life safety codes; cannot use uninhabitable structures (garages, barns, sheds).
3. Obtain liability insurance. Required for property's use as a short-term rental.
4. Apply for your STR permit. Submit application. Fees vary by type: Short-Term Vacation Rental Certificate - Homestay $250; Short-Term Vacation Rental Certificate - Absentee $500. See permit types above to determine which applies.
5. Register for tax accounts. Set up lodging tax accounts with Hamilton County (Trustee) for the local hotel/motel occupancy tax; Tennessee Department of Revenue for state and local option sales tax and for marketplace-remitted occupancy tax.
6. Collect and remit taxes. 17.25% on all bookings.
7. Renew annually. Renewal fees vary by permit type ($250 / $500). See permit types above.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Chattanooga?

Yes. Chattanooga requires a short-term rental permit to operate an Airbnb or Vrbo, and there are 2 permit types — one requires the property to be your primary residence, and another allows non-owner-occupied (investment) use. See the permit types above to find which applies to your property.

How much does a short-term rental permit cost in Chattanooga?

Permit costs in Chattanooga vary by type: Short-Term Vacation Rental Certificate - Homestay $250; Short-Term Vacation Rental Certificate - Absentee $500.

Does Chattanooga require a short-term rental to be your primary residence?

It depends on the permit type. At least one Chattanooga permit requires the property to be your primary residence, while another allows non-owner-occupied (investment) use — see the permit types above.

How many days a year can you short-term rent in Chattanooga?

Chattanooga does not cap the number of nights per year you can short-term rent, though permitting, zoning, and occupancy rules still apply.

What taxes do you pay on a short-term rental in Chattanooga?

Short-term rental stays in Chattanooga are subject to a combined 17.25% in lodging taxes. This combines 7% Tennessee State Sales Tax + 2.25% Hamilton County Local Option Sales Tax + 4% Hamilton County Hotel/Motel Occupancy Tax + 4% City of Chattanooga Hotel/Motel Occupancy Tax. The host is responsible for collecting and remitting them.

What happens if you run a short-term rental without a permit in Chattanooga?

False statements in an application are grounds for denial, revocation or suspension, and/or imposition of penalties including denial of future applications.