Short-term rentals are legal in Nashville, but every operator needs a Short Term Rental Property (STRP) permit from Metro Codes before listing — and the permit type determines everything.
Owner-occupied permits are available in nearly any residential zone. Non-owner-occupied permits — the kind investors need — are no longer issued in residential zones at all. If your client is underwriting a pure investment STR in Nashville, zoning is the first check, not the last.
| Rule | Detail |
|---|---|
| Permit required | Yes — STRP permit from Metro Codes before listing. |
| Owner-occupied (OO) | Available in most residential zones; owner must permanently reside on-property; natural persons only (no LLCs). |
| Non-owner-occupied (NOO) | Not issued in residential zones (AR2A, R, RS, RM). Only in commercial/mixed-use districts (MUN, MUL, MUG, MUI, OG, OR20–OR40-A, ORI, CN, CL, CS, CA, CF, DTC, SCN, SCC, SCR). |
| Grandfathering | Existing residential NOO permits renew, but generally do not transfer on sale. |
| Max stay | 30 consecutive days. |
| Permit term | 365 days; renew before expiration. |
| Taxes | Metro hotel occupancy tax + $2.50/night + 7% TN sales tax + 2.25% local sales tax (combined roughly 15–16%+ of nightly revenue — verify current occupancy rate with Metro Finance). |
Permit required
Yes — STRP permit from Metro Codes before listing.
Owner-occupied (OO)
Available in most residential zones; owner must permanently reside on-property; natural persons only (no LLCs).
Non-owner-occupied (NOO)
Not issued in residential zones (AR2A, R, RS, RM). Only in commercial/mixed-use districts (MUN, MUL, MUG, MUI, OG, OR20–OR40-A, ORI, CN, CL, CS, CA, CF, DTC, SCN, SCC, SCR).
Grandfathering
Existing residential NOO permits renew, but generally do not transfer on sale.
Max stay
30 consecutive days.
Permit term
365 days; renew before expiration.
Taxes
Metro hotel occupancy tax + $2.50/night + 7% TN sales tax + 2.25% local sales tax (combined roughly 15–16%+ of nightly revenue — verify current occupancy rate with Metro Finance).
The owner must permanently reside at the property and must be a natural person — LLCs, trusts, and partnerships are ineligible. Rentals are limited to one party at a time and up to four sleeping rooms. If your client plans to house-hack (live in, rent part), this is the viable path in residential Nashville.
Metro no longer issues NOO permits in residential zoning districts. New NOO permits exist only in commercial and mixed-use zones. Existing residential NOO permits are grandfathered and renewable — but grandfathered status generally does not survive a sale, which means a "turnkey STR with permit" listing in an R zone is usually worth less than the listing copy implies. Verify the zone and the permit's transferability before your client writes an offer.
Nashville STRs owe Metro's hotel occupancy tax plus a $2.50 nightly fee, on top of Tennessee's 7% state sales tax and 2.25% local sales tax. Platforms collect some but not all of these — hosts commonly remit the Metro occupancy tax monthly themselves. Model roughly 15–16% of gross nightly revenue for taxes unless the listing platform documentation confirms otherwise. Verify the current Metro occupancy rate with the Nashville Metro Finance department before publishing deal analyses.
Nashville is a zoning-binary market. The same house earns institutional-grade returns in a DTC or mixed-use zone and zero STR revenue two streets away in an RS zone. Three checks before the pro forma:
The VaultSTR Pro Forma flags permit status by jurisdiction as part of every Nashville deal analysis.
Sources
This is general information, not legal advice. Verify current rules with Metro Codes before advising a client.
Can an investor buy a house in Nashville and run it as an Airbnb?
Only if it sits in a commercial or mixed-use zone that allows non-owner-occupied STRPs. Residential zones (R, RS, RM, AR2A) no longer receive new NOO permits.
Do existing permits transfer when a property sells?
Owner-occupied permits don't — the new owner must qualify and reside there. Grandfathered residential NOO permits generally lose their status on transfer. Treat any claim otherwise as unverified until Metro Codes confirms it in writing.
How long does an STRP permit last?
365 days. Renew before expiration; a lapsed grandfathered permit can mean losing NOO status permanently.
What happens if a client operates without a permit?
Metro enforces via fines and can bar future permit eligibility. Unpermitted revenue also can't be used credibly with DSCR lenders.
The VaultSTR Pro Forma flags permit status and builds the full Nashville tax stack into every deal analysis — before your client writes the offer.
Free to use. No credit card required.
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