As a short term rental owner or a prospective airbnb buyer in Central Texas, it's important to understand hotel occupancy tax rates in the area. These rates can affect your bottom line as well as how competitive your listing price appears compared to other airbnbs. Thus, it's essential to know what the hotel occupancy tax rate is for a property you are considering turning into a short term rental investment. Throughout the greater Austin area, hotel occupancy tax rates can vary widely.
All short term rental bookings in Texas are subject to the state hotel occupancy tax of 6%. However, depending on the property's municipal jurisdiction or lack there-of there may be additional city hotel occupancy taxes. Most cities adopt a hotel occupancy tax at a rate of seven percent. Additionally, Texas law caps the total combined hotel occupancy tax rate at seventeen percent for properties located within a city's full purpose jurisdiction. Thus, no city can impose a hotel occupancy tax rate higher than 11%. Bookings at properties located within the city limits of Austin are subject to the maximum 11% hotel occupancy tax. However, bookings at properties located in the extraterritorial jurisdiction (ETJ) of Austin are not subject to the 11% hotel occupancy tax. In fact, these properties are only subject to the state hotel occupancy tax requirement of 6%.
You may come to the conclusion that thus all properties located in an ETJ are not subject to hotel occupancy taxes at the municipal level. Unfortunately, that is not the case. Smaller cities with a population of under 35,000 have the ability to adopt the hotel occupancy tax within that city’s ETJ. According to Texas law, if a city adopts the hotel occupancy tax within its ETJ, the combined state, county, and municipal hotel occupancy tax rate may not exceed 15 percent.
Here are some of the hotel occupancy rates for cities in central Texas:
City of Austin | 11% |
City of Bastrop | 7% |
City of Cedar Park | 7% |
City of Dripping Springs | 7% |
City of Georgetown | 7% |
City of Johnson City | 7% |
City of Jonestown | 7% |
City of Lakeway | 7% |
City of Pfluggerville | 7% |
City of Round Rock | 9% |
City of Wimberley | 7% |
If you have more questions about hotel occupancy rate implications for your Austin area airbnb investment or general questions about investing in a short term rental in Central Texas, give us a call!
