Nashville short term rental permits in 2026: what owners need to know

Every nightly rental in Nashville and Davidson County needs a short term rental permit from Metro Codes, and the rules decide more about your rental than any listing photo ever will. They decide whether you can rent the home at all, whether you can keep renting it after you move it into an LLC, and whether a buyer can keep renting it after you sell.

Here is how the permit works in 2026, written for owners. Rules change, so confirm anything important with Metro Codes before you act on it.

The two kinds of permit

Metro issues two permit types:

• Owner occupied. You live in the home as your primary residence and rent all or part of it. The permit holder has to be a person, not an LLC or a trust, and you have to document that it is your residence.
• Non owner occupied. An investment property you do not live in. This is the permit most investors need, and it is the one with the tightest limits.

Both permits cost $313 and are good for 12 months. You renew every year, and the renewal asks for proof of insurance and proof that occupancy taxes were paid.

Where new non owner occupied permits are still allowed

This is the part that surprises most buyers. As of early 2026, Metro does not issue new non owner occupied permits in residential zones such as AR2a, R, RS and RM. New permits are limited to certain commercial and mixed use districts, along with downtown.

Homes in residential zones that already held a non owner occupied permit were allowed to keep renting, as long as ownership does not change. That protection is tied to the owner, not the house.

New permits also have to sit at least 100 feet from churches, schools, parks and daycares.

If you are buying a home to rent, check the zoning and the current permit status before you make an offer, not after you close.

What voids a permit

Nashville permits cannot be transferred or assigned to another person, entity or address. In practice that means:

• Selling the home ends the permit. In a residential zone, the buyer usually cannot get a new non owner occupied permit.
• Moving the home into an LLC or a trust counts as a change of ownership. Talk to your attorney before you retitle a rental, even to your own company.
• A permit is for one address. It does not follow you to a new property.

The responsible party rule

Non owner occupied rentals need a local responsible party who can be reached during every stay and is close enough to respond. Their name and phone number are posted inside the home. Most owners who live out of town name their manager. If you self manage from another city, this rule alone is a reason to have someone local.

Insurance, occupancy limits and house rules

A few operating rules apply to every permitted rental:

• Liability coverage of at least $1 million per occurrence.
• Occupancy is capped at twice the number of sleeping rooms, plus four.
• The person who books has to be at least 21.
• No parties or events, and quiet hours apply, so house rules and the guest welcome need to say so plainly.

Taxes on each stay

Airbnb collects and pays Tennessee sales tax and Metro's occupancy tax on the bookings made through Airbnb. Direct bookings, and some bookings from other sites, are on you to report and pay to the state and to Metro by the 20th of the following month. Keep the receipts, because the annual renewal asks for proof that the taxes were paid.

Short term rentals are also assessed as commercial property for property tax, at 40% instead of the 25% residential rate, so budget for a higher tax bill than a long term rental would carry.

Enforcement is getting tighter

Metro checks listings against its permit records and follows up on neighbor complaints. Fines for renting without a permit start at $50 a day, and owners who list a home before they have a permit can lose the ability to apply for a year. In one week this October, Metro sent warnings to 14 unpermitted properties, more than half of what it sent in the entire month before.

As of this summer there were roughly 6,900 active permits in Davidson County, against more than 11,000 listings advertised online. That gap is closing.

A checklist before you rent, buy or switch managers

1. Confirm the zoning and whether a permit exists for the address, and whose name it is in.
2. If you are buying, ask whether the seller's permit is owner occupied or non owner occupied, and assume it ends at closing.
3. Talk to your attorney before moving a rental into an LLC or trust.
4. Line up $1 million in liability coverage and a local responsible party.
5. Put the renewal date on your calendar 60 days out, with insurance and tax receipts ready.
6. Keep track of direct bookings so their taxes get filed.

How we handle it

When we manage a Nashville home, the permit is part of the job. We check zoning and permit status before you sign, act as your local responsible party, track the renewal date, and keep the tax records the renewal asks for. Full service is 12% of booking revenue, everything included.

See what your Nashville home could earn, or read more about how we manage Nashville rentals.