Navigating the short-term rental legal process
Setting up a short-term rental listing in Louisville, KY is not as difficult as you would think. Many parts of the country are plagued by heavy regulation that can increase the barriers-to-entry for newcomers and those unfamiliar with the process. Louisville’s short-term rental climate is very accepting, as long as your property fits the guidelines and you follow the proper legal requirements.
A short-term rental is defined as a rental that is 29 consecutive days OR LESS. Rentals of thirty (30) days or more are not short-term rentals, by law, and therefore not governed by short-term rental laws or zoning requirements and do not require special permits or registration (other than as a rental property). Tax obligations are due to both the state of Kentucky and City of Louisville for all short term rentals, and are as follows:
State of Kentucky (collected and paid by Airbnb): Sales Tax: 6% Transient Tax: 1%
City of Louisville (collected and paid by Airbnb): Hotel or Bed Tax: 8.5%
Not all properties can be short term rentals
Property types that qualify for short-term rentals in Louisville, KY:
Single Family Residence Duplex Condominium* Commercial Building**
*Condominium owners must have written permission from the association board. Residentially zoned condominiums must be owner occupied. Commercially zoned condominiums do not have an owner occupied requirement.
**Commercial Buildings must be zoned OR, OR-1, OR-2, OR-3, OTF, C-N, C-R, C-1, C-2, C-3, C-M, EZ-1, W-1, W-2, PVD, PTD PRD
Property types that DO NOT qualify for short-term rentals in Louisville, KY:
Multi-family Dwellings (3 or more units under a single roof)
You can have more than three listings on a single plot or land (example: The main house is a duplex and the back yard has a carriage house), but not under the same roof.
Commercial buildings can also have more than three (3) short-term rental units.
Short Term Rentals in Louisville Condos
All Residential Condos must have a CUP and must be owner-occupied.
Any condo within any R zone:
1) Requires a CUP 2) Must be primary residence of owner 3) Must have written confirmation of permission from condo association
Commercially-zoned condos do not require a CUP or owner-occupancy, but check with the COA bylaws to ensure STRs are permitted.
Registration and Permitting –
If the property you are looking to rent is your primary residence, you are only required to register with Louisville Metro Planning and Design Services ANNUALLY, pay $100, and register with Louisville Metro Revenue Commission for payment of occupancy tax.
If the property you are looking to rent is NOT your primary residence, or is in the TNZD (traditional neighborhood zoning district), you must apply for and obtain a conditional use permit (CUP) from Louisville Metro Government in order to legally operate a short-term rental.
For additional information on registering your short-term rental property in Louisville, visit this page
Additional short term rental rules to follow…
Obtain a CUP (if necessary)
Register annually with Louisville Metro Planning and Design Services
Collect & remit 8.5% Occupancy Tax to Louisville Metro Revenue Commission, if renting outside of Airbnb
Collect & remit 6% sales tax and 1% transient tax to the State of Kentucky, if renting outside of Airbnb
Meet smoke detector requirements
Post an evacuation plan
Do not serve or sell prepared food or alcohol
Do not post outdoor signage as advertisement (unless commercially zoned)
Occupancy limitations are 2X the number of bedrooms, plus two (2)
Failure to register is the equivalent of operating without a permit
STR regulations do not supersede lease agreements, homeowner’s association bylaws, covenants, deed restrictions, or any other agreement, law or regulation that prohibits subletting or use of your dwelling as a short-term rental.