This guide covers short-term rental rules for the City of Waco, Texas. Neighboring markets often confused with Waco include:
- Bellmead: Separate city with its own STR rules and licensing requirements.
- Lacy Lakeview: Distinct municipality north of Waco, often grouped with Waco in rental data but governed independently.
- Woodway: Affluent suburb southwest of Waco, with different zoning and STR enforcement.
- Hewitt: Southern neighbor to Waco, operates under its own city ordinances for rentals.
Legality Verdict
Short-term rentals are legal in Waco, Texas, but require a city license, owner-occupancy, and compliance with density and zoning rules. The regulatory climate is stable but approvals are case-by-case, especially in residential areas.
- Legality Status: 4/5
- License Availability: 4/5
- Compliance Cost (% revenue): 1/5
- Regulatory Stability: 3/5
- Enforcement Climate: 4/5
TL;DR
Waco defines STRs as rentals under 30 days and requires a city license ($150 initial, $50 renewal). The total lodging tax is 15% (7% city, 6% state, 2% county). Owner-occupancy is mandatory, and density/parking rules apply. The biggest investor risk: approvals are handled case-by-case, with neighborhood opposition possible and no citywide cap but strict local scrutiny. Enforcement is complaint-driven, not platform-based.
Quick Facts
| Item | Detail |
|---|---|
| STR Definition | Rental of a furnished home, apartment, or condo for less than 30 consecutive days Planning Short Term Rentals City of Waco |
| Registration Required | Yes — City of Waco STR license 1 Checklist for Short Term Rental License Application |
| Permit Cost | $150 application fee Hostaway |
| Annual Renewal | $50 renewal fee Hostaway |
| Primary Regulator | City of Waco Planning & Zoning, 300 Austin Ave, (254) 750-5640 CityApplications.com |
| License Cap | Not codified — no explicit citywide cap in available sources 1 Checklist for Short Term Rental License Application |
| Transferability | Not codified — no explicit rule on permit transfer in available sources 1 Checklist for Short Term Rental License Application |
| Total Effective Lodging Tax | 15% (7% city, 6% state, 2% county) City of Waco – Fiscal Management Services |
| State Hotel Occupancy Tax | 6% Texas Comptroller |
| City Hotel Occupancy Tax | 7% City of Waco – Fiscal Management Services |
| County Hotel Occupancy Tax | 2% City of McGregor, TX |
| Tax Filing Frequency | Monthly, due by the 20th Waco Hotel Occupancy Tax Remittance Form |
| STR Occupancy Cap | No more than 4 unrelated individuals per unit 1 Checklist for Short Term Rental License Application |
| Parking Requirement | No on-street parking for guests (except C-4 zones) 1 Checklist for Short Term Rental License Application |
| Owner-Occupancy | Required — owner must reside on property and be present during rental APPLICATION REVIEW Z-22-65 |
| Inspection Requirement | Yes — city departments may inspect for code compliance APPLICATION REVIEW Z-22-65 |
| Density Limits | Yes — distance and density requirements apply 1 Checklist for Short Term Rental License Application |
| Enforcement Penalties | Not codified — no specific city penalty schedule in available sources 1 Checklist for Short Term Rental License Application |
| Last Updated | July 15, 2026 |
Regulatory Impact Snapshot
Waco’s STR regime imposes a high compliance cost due to the 15% total lodging tax and mandatory city licensing. Owners must pay a $150 application fee, $50 annual renewal, and remit city and county taxes directly (platforms only collect the state portion). Owner-occupancy and density rules sharply limit absentee investment models. Underwriters should model compliance costs at 15.4% of gross revenue, with median Waco STRs earning $28,050 at an average daily rate of $211 and 39% occupancy. The binding constraint: approvals are case-by-case, especially in residential zones. Run this market in our Airbnb Calculator →
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Frequently Asked Questions
Basics
What is considered a short-term rental in Waco?
A short-term rental is any furnished home, apartment, or condo rented for less than 30 consecutive days Planning Short Term Rentals City of Waco.
Are short-term rentals legal in Waco, Texas?
Yes, STRs are legal but require a city license and must comply with zoning, density, and owner-occupancy rules Destination Waco.
Does Texas law protect STRs from local bans?
No, Texas does not have a statewide preemption law; each city, including Waco, can regulate or ban STRs Awning.com.
Licensing
Is a license required to operate an STR in Waco?
Yes, a City of Waco STR license is required 1 Checklist for Short Term Rental License Application.
How much does the STR license cost?
The application fee is $150, and annual renewal is $50 Hostaway.
Is there a cap on the number of STR licenses in Waco?
No explicit citywide cap is codified, but density and distance rules apply 1 Checklist for Short Term Rental License Application.
Are STR licenses transferable on sale?
Not codified — no explicit rule on permit transfer in available sources 1 Checklist for Short Term Rental License Application.
Taxes
What is the total lodging tax rate for Waco STRs?
15% total: 7% city, 6% state, 2% county City of Waco – Fiscal Management Services.
Who collects and remits these taxes?
Airbnb/VRBO collect/remit the 6% state tax; hosts must remit city and county taxes directly Airbnb Help Center.
How often must taxes be filed?
Monthly, with payment due by the 20th of the following month Waco Hotel Occupancy Tax Remittance Form.
Do I need a Texas Sales and Use Tax Permit?
Yes, before collecting/remitting hotel occupancy tax to the state GoWithSurge.
Operations
Is owner-occupancy required for Waco STRs?
Yes, the owner must reside on the property and be present during rentals APPLICATION REVIEW Z-22-65.
What is the occupancy limit for STRs?
No more than 4 unrelated individuals per unit 1 Checklist for Short Term Rental License Application.
Are there parking requirements?
Yes, no on-street parking for guests except in C-4 zones 1 Checklist for Short Term Rental License Application.
Are inspections required?
Yes, city departments may inspect STRs for code compliance APPLICATION REVIEW Z-22-65.
Enforcement
How is STR enforcement handled in Waco?
Enforcement is primarily complaint-driven and case-by-case, with council and commission review for contentious applications Waco Tribune-Herald.
Are there specific fines for violations?
Not codified — no specific city penalty schedule in available sources; state tax penalties may apply GoWithSurge.
Has Waco conducted STR crackdowns?
No evidence of citywide crackdowns or platform monitoring as of July 2026 Waco Tribune-Herald.
Are approvals guaranteed if I meet requirements?
No, approvals are case-by-case, especially in residential neighborhoods, and may face neighborhood opposition Waco Tribune-Herald.
Permit Process
Waco requires all STR operators to obtain a city license before renting. The application is managed by the Planning and Zoning office and costs $150, with a $50 annual renewal. Applicants must comply with density and distance requirements, and provide documentation of parking and owner-occupancy. There is no explicit citywide cap on licenses, but approvals are not guaranteed and are subject to neighborhood input and zoning review 1 Checklist for Short Term Rental License Application.
Zoning
STRs are subject to zoning restrictions, including owner-occupancy and density limits. No more than four unrelated guests may occupy a unit. On-street parking is prohibited for guests except in C-4 commercial zones. Residentially zoned STRs must direct lighting inward and comply with sign regulations. The city may inspect properties for compliance at any time APPLICATION REVIEW Z-22-65.
Taxes and Remittance
Waco STRs are subject to a combined 15% lodging tax: 7% city, 6% state, and 2% county. Airbnb and VRBO collect only the state portion; hosts must register, collect, and remit city and county taxes directly. Tax returns are due monthly by the 20th. A Texas Sales and Use Tax Permit is required before collecting or remitting state taxes City of Waco – Fiscal Management Services.
Enforcement and Recent Actions
Enforcement is primarily complaint-driven, with city council and plan commission reviews for individual STR applications, especially in contentious neighborhoods. There is no evidence of citywide crackdowns or platform monitoring as of July 2026. Penalties for violations are not codified in city sources, but state tax penalties may apply for noncompliance Waco Tribune-Herald.
Recent Changes and Pending Legislation
Waco’s STR regulations are under active review, with recent plan commission discussions and city council votes on individual STR applications. No citywide ordinance overhaul or platform enforcement mandate has been enacted as of July 2026. Investors should monitor for future amendments, especially regarding zoning and density Waco Tribune-Herald.
Comparable Markets
- Austin, TX: Consider if you want a large metro with strict STR caps and platform enforcement.
- San Antonio, TX: Consider for a major Texas city with a defined STR ordinance and moderate compliance costs.
- Dallas, TX: Consider for a large urban market with evolving STR rules and neighborhood activism.
- Fort Worth, TX: Consider for a North Texas city with a stable STR regime and clear licensing.
Sources
- City of Waco – Fiscal Management Services: https://www.waco-texas.com/Departments/Fiscal-Management-Services/Hotel-Occupancy-Taxes
- 1 Checklist for Short Term Rental License Application (City of Waco): https://www.waco-texas.com/files/sharedassets/public/v/1/departments/planning-amp-zoning/documents/short-term-rental-license.pdf
- APPLICATION REVIEW Z-22-65 HEARING DATE: October 25, 2022: https://www.waco-texas.com/files/sharedassets/public/v/1/departments/planning-amp-zoning/documents/pcmeetings/2022-2024-folders/10.25.22/z-22-65.pdf
- Waco Hotel Occupancy Tax Remittance Form: https://revds.com/taxpayerpdfs/CA-GA-LA-KY-TX-forms/Texas%20Hotel%20Motel%20Occupancy%20Tax%20Forms/Waco%20Hotel%20Occupancy%20Tax%20Remittance%20Form%20with%20TPID%20Assessment%20Fee.pdf
- Planning Short Term Rentals City of Waco: https://www.waco-texas.com/Departments/Development-Services/Planning-Services/Short-Term-Rentals
- Texas Comptroller of Public Accounts: https://comptroller.texas.gov/taxes/hotel/faq.php
- City of McGregor, TX (citing McLennan County): https://cityofmcgregor.com/city-government/hotel-motel-occupancy-tax/
- Waco Tribune-Herald: https://wacotrib.com/news/government/city-council-oks-short-term-rental-in-east-waco-over-neighborhood-associations-objection/article_75ae3986-851a-5b86-87e4-63538f4d6f79.html
- Waco Tribune-Herald: https://wacotrib.com/news/government/barndominium-owner-now-fighting-for-vacation-rental-in-cameron-park/article_e5fd7614-13c3-5ade-9888-a8bee8dc39da.html
- Hostaway: https://www.hostaway.com/blog/airbnb-rental-arbitrage-in-waco/
- Airbnb Help Center: https://www.airbnb.com/help/article/2331
- GoWithSurge: https://www.gowithsurge.com/blog/texas-hotel-occupancy-tax-strs
- Awning.com: https://awning.com/post/texas-short-term-rental-laws
- Destination Waco: https://destinationwaco.org/wp-content/uploads/2023/10/Steps-to-Operating-a-Short-Term-Rental-In-the-City-of-Waco.pdf
- CityApplications.com: http://www.cityapplications.com/business-licenses/TX-Texas/biz-Waco.html
- LegalClarity.org: https://legalclarity.org/texas-supreme-court-ruling-on-short-term-rentals/
- Rentalsz.com: https://rentalsz.com/city-of-waco-ordinances/
This page is research, not legal advice. Consult local counsel before acquiring or operating a short-term rental in City of Waco, McLennan County, Texas.
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