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:

For more information on STR zoning in Louisville, download our free REALTOR guide
For a complete checklist of what to include in your new STR, download our free guide

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…

Other Rules:

  • 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.
  • The following cities that retain independent zoning authority have not adopted a zoning ordinance specifically allowing short term rentals and therefore do not allow them: Anchorage, Douglass Hills, Graymoor-Devondale, Hurstbourne, Indian Hills, Jeffersontown, Lyndon, Prospect, Shively, St. Matthews and St. Regis Park. Therefore, check regulation before beginning the STR process in these areas.

HELPFUL LINKS:

Applications

1. Short Term Rental Annual Registration Application Form  (In Person or Mail Submittal Option)
2. Short Term Rental CUP Pre-Application
3. Short Term Rental CUP Formal Application

Helpful Links

How to register your short term rental
LOJIC map to find your property’s zoning
Frequently Asked Questions
Metro Council Short Term Rental Ordinance Amending Metro Code (Title XI, Chapter 115.515–115.521)
Metro Council Short Term Rental Ordinances Amending Land Development Code
Smoke Detector Requirements (Title IX, Chapter 94.02)
Map of Metro Council Zoning Authority Area
Process for Conditional Use Permit approval
Louisville Metro Revenue Commission