Short-term rental rules · Key West, Florida
Short-term rentals in Key West, explained properly.
Key West splits residential rentals into two categories: non-transient rentals, which may not be rented for less than 29 days at a time, and transient rentals of 28 days or less, which require a transient rental license. The city stopped issuing new transient licenses years ago and grandfathered the existing ones, so legal nightly or weekly rentals depend on a property already holding one of a limited pool of licenses — which transfer with the property and trade on a secondary market for as much as $400,000. Every rental also needs a City of Key West Business Tax Receipt and a Florida DBPR license, and rentals owe Monroe County's 5% tourist development tax on top of 7.5% Florida sales tax. Transient use is also limited to a handful of zoning districts, and Truman Annex's roughly 300 settlement-based transient licenses expired on December 22, 2025.
At a glance
What you need to know before you buy or list
| Question | Answer |
|---|---|
| Transient = 28 days or less; non-transient = 29+ days | Non-transient residential rentals may not be rented for less than 29 days at a time; rentals of 28 days or less are transient and require a transient rental license [1] |
| No new transient licenses; existing ones grandfathered | The city stopped issuing transient rental licenses and grandfathered those already in existence; the city's own FAQ confirms a current cap on new transient licenses, so the supply of legal short-term rental units is effectively fixed. Transient use is also limited by zoning: a property can be rented transiently only if it is in a district that allows it (HRCC-1, HRCC-3, HCT, HNC-1 and HNC-3), and in HNC-1 and HNC-3 conversion of permanent housing to transient use is allowed only if no on-site reduction of permanent housing occurs. The exact adoption date and ordinance number of the cap were not confirmed in this pass [2] [3] |
| Licenses transfer and trade for up to $400,000 | Transient licenses can be transferred, and homes holding them carry a premium; a local brokerage reports secondary-market license prices of as much as $400,000. Moving a transient unit and license to a different property is not automatic: it goes through the city's transfer process (City Code Section 122-1338) with Planning Board review, and the receiving site must be in a zoning district that allows transient use. About 300 Truman Annex transient licenses created under a 2005 settlement were voided on December 22, 2025 and, per local reporting, will not be recirculated for purchase elsewhere [3] [4] [5]Confirming |
| City Business Tax Receipt and Florida license required | All residential rental properties need a City of Key West Business Tax Receipt; transient rentals also require a State of Florida license as part of the application. Business tax amounts are set in City Code Section 66-109 [1] |
| City urges renters to verify licenses | The city recommends renters confirm a vacation rental's license with the Licensing Division before sending payment [1] |
| Monroe County 5% tourist tax plus 7.5% sales tax | Rentals of six months or less owe the 5% Monroe County Tourist Development Tax, filed with the Monroe County Tax Collector, plus 7.5% Florida sales tax (6% state plus 1.5% Monroe County surtax) filed with the Florida Department of Revenue: 12.5% combined. The Tax Collector states that Airbnb, VRBO and other platforms do not remit the 5% tourist tax, so hosts must file it themselves [6] [7] [8] [9] |
| Fines reported up to $5,000 per violation | A secondary source reports a written warning or fine up to $500 for a first violation and $1,000 to $5,000 per subsequent violation, plus platform delisting on city notice; not confirmed against the city code [10]Confirming |
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Detailed rules
The full picture, section by section
Florida statewide framework
| Key West's rules rely on Florida's pre-2011 grandfather clause | Florida Statutes 509.032(7) bars local governments from prohibiting vacation rentals or regulating stay length unless their ordinance was in place by June 1, 2011; Key West's transient-rental restrictions predate that cutoff (the exact Key West ordinance dates were not confirmed in this pass). The 2026 Florida Statutes still carry the June 1, 2011 grandfather clause; CS/SB 280 (2024), which would have changed the framework, was vetoed on June 27, 2024 [11] [12] [13] |
|---|
Changes
Recent and pending changes
We checked the City of Key West FAQs (licensing and planning), Key West Legistar records on transient unit transfers, local news on the Truman Annex sunset (December 2025), the Monroe County Tax Collector tourist-tax page, Florida DOR rate forms DR-15TDT and DR-15DSS, the 2026 Florida Statutes 509.032(7), and the 2024 CS/SB 280 veto record. No pending city ordinance or 2026 state law change to the transient-rental framework was found. The license cap's adoption date and ordinance number, the current business-tax amount for transient units (City Code 66-109), and the penalty schedule are still not confirmed from official sources; the city code on Municode could not be read. Watch City Commission agendas for any Truman Annex extension proposal and for changes to transient licensing, and state sessions for any change to the pre-2011 grandfather clause.
Under a 2005 settlement agreement, Truman Annex properties held transient licenses (weekly rentals for half the year, monthly for the rest) for 20 years. The city notified owners that all of those licenses would be placed into inactive status and void on December 22, 2025; since then Truman Annex owners may not rent for less than a month. A proposal from owners to extend the licenses for another 20 years in exchange for $15 million toward affordable housing was not placed on a City Commission agenda, and the roughly 300 licenses will not be recirculated for purchase elsewhere in the city.
Sources
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This page is general information compiled from public sources, not legal or tax advice. HOA rules, deed restrictions and zoning for a specific property can be stricter. Confirm with the local permitting office and a qualified professional before buying or listing a property.