Guide · Cost to run
What it costs to run a Nashville short-term rental.
The permit fee is small. The real questions in Nashville are whether your zone allows a permit, how the layered taxes add up, and whether you can meet the insurance and local-contact rules.
The short answer
Four numbers to know
| Permit | $313 a year Due when your application is approved and again at each yearly renewal. Permits last 12 months and cannot be transferred. |
|---|---|
| Occupancy tax | 7% of the rental plus $2.50 per room night This is the Metro hotel occupancy tax. Sales tax of 9.75% (7% state plus 2.75% Davidson County) applies on top. |
| Insurance | At least $1 million per occurrence Proof is required at application and renewal. Premiums vary by property, so get a quote before you buy. |
| Guest limit | Two per sleeping room plus four, maximum 12 No more than four sleeping rooms, and only one party at a time. |
Fixed cost
What the permit costs
Metro Codes publishes one fee for both new permits and renewals. The columns show how many booked nights, at an example nightly rate before tax, cover it (examples, not forecasts).
| Item | Amount | Nights at $150 | Nights at $250 | Nights at $400 |
|---|---|---|---|---|
| Permit, new or renewal | $313.00 | 2.1 | 1.3 | 0.8 |
| If paid by credit card (2.3% fee) | $320.20 | 2.1 | 1.3 | 0.8 |
Source: Metro Nashville Codes short-term rental FAQ, read October 5, 2026. Paying by exact cash or check avoids the card fee. Not included: a Davidson County business tax license, neighbor-notice mailing costs, insurance premiums and any certified floor plan costs.
Guest-paid, but it shapes your price
The tax stack on a stay
An illustration: one room for 3 nights at $300 is a $900 rental price. On the published rates, tax comes to about $158.25 (17.6% of the price).
| Tax | Rate | On the $900 example |
|---|---|---|
| Metro hotel occupancy tax | 7% | $63.00 |
| Per-room-night surcharge | $2.50 per room night | $7.50 |
| Tennessee state sales tax | 7% | $63.00 |
| Davidson County local sales tax | 2.75% | $24.75 |
| Total | — | $158.25 |
This is a simplified illustration on the base rental price. Which fees (cleaning, for example) are taxed, and how the taxes are computed, can differ, so check with the Metro Collections Office and the Tennessee Department of Revenue before you price. Platforms such as Airbnb collect applicable state sales and local occupancy taxes for bookings made through them. If you take payment yourself or a platform does not collect, hotel returns are due to Metro Collections by the 20th of each month.
The real constraint
Whether you can get a permit
| Owner-occupied | Available in most zones For the owner's primary residence, or a lot with an owner-occupied residence. |
|---|---|
| Not owner-occupied | Only in certain commercial and mixed-use zones New permits are not issued in residential zones. Check the property's zoning district before you make an offer, since the answer decides whether an investor rental is possible. |
| Applying without one | Citations and a one-year wait Operating without a permit means enforcement action and a mandatory one-year wait before you can apply. |
| Other requirements | Neighbor notice, HOA statement, local contact within 25 miles Plus proof of tax registration and a certified floor plan. Lead renter must be 21 or older, and the permit number goes in every listing. Permits can be revoked after three violations. |
Full sourced rules, with evidence for each line, are on the Nashville market page. For comparison, see Nashville vs Austin, or the Austin cost guide.
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