Top Chattanooga STR Questions & Answers

Here's a rundown of the questions people most commonly ask about Chattanooga short-term rentals (STRs), based on current sources:

1. Are short-term rentals legal in Chattanooga?
Yes, but with restrictions. Chattanooga distinguishes between Homestay (owner-occupied) STRs allowed in the STVR Overlay District and Absentee (non-owner-occupied) rentals restricted to mixed-use and commercial zones. So whether you can operate one depends heavily on your specific address and zoning.

2. Do I need a permit/license to operate one?
Yes — you apply online via the city's Open Gov Portal and upload documents like a state ID, proof of ownership, insurance, city business license, site/floor plan, and emergency escape plan. The non-refundable application fee is $250 for a homestay and $500 for an absentee (non-owner-occupied) rental, and certificates must be renewed annually and posted inside the unit. ComparentComparent

3. What's the difference between "Homestay" and "Absentee" rentals?
Chattanooga defines a short-term vacation rental (STVR) as a structure with no more than five bedrooms used for paid overnight stays of no more than 30 days. Homestay means it's your primary residence; absentee means it's not — and absentee rentals face much tighter zoning limits.

4. Where in the city are STRs actually allowed?
Homestay rentals are allowed in residential zones within the STVR Overlay District and specified commercial zones, while absentee rentals are restricted to mixed-use and commercial zones that allow hotels. Since those commercial/mixed-use zones represent a small fraction of the city's housing stock, non-owner-occupied investment rentals are fairly limited citywide. ComparentComparent

5. What taxes do I need to collect and pay?
In Chattanooga, the room occupancy tax is 4% and the sales tax is 9.25%. Guesty

6. Is there an occupancy limit?
Most Tennessee cities, including Chattanooga's general framework, limit occupancy to roughly two guests per bedroom, up to about 12 guests per property. Guesty

7. What safety/insurance requirements apply?
Units must meet life safety standards (smoke and CO detectors), post the STVR certificate along with owner contact info, and remit all applicable taxes. Tennessee also has a statewide requirement of at least $500,000 in liability insurance, unless the listing platform provides equivalent coverage. ComparentGuesty

8. Do I need a local contact person available for emergencies?
Yes — a common theme across TN cities is that a local contact must be available within a short window (often around 2 hours) to handle complaints or emergencies. Awning

9. Is there a cap on how many units in a building can be STRs?
Short-term rentals in multi-family dwelling units generally shouldn't exceed 25% of the total number of units in that building. Guesty

10. Can my HOA or neighborhood override city rules and ban STRs?
This isn't Chattanooga-specific, but it's a very common concern: HOA and condo association rules can ban STRs even where local law otherwise permits them, so it's worth reviewing your CC&Rs before listing. Houfy

11. What happens if my STR application is denied?
You can appeal to the Board of Zoning Appeals, and if that denial is upheld, you can further appeal to Chancery Court — the appeal must be submitted within sixty days of the denial or permit revocation. Chattanooga

12. What changed recently (2026)?
Beginning January 1, 2026, Chattanooga now requires the Short-Term Vacation Rental certificate to be physically posted in the rental, plus a photo of it uploaded with the renewal application. Chattanooga

A couple of practical notes: one review source flagged that for a property rezoned to allow STRs, the owner can't apply for an absentee STVR certificate within 18 months of the rezoning's effective date — a detail that trips up investors buying newly-rezoned property. Also, regulations here move fairly often, so before you apply or buy, it's worth confirming current rules directly through Chattanooga's official STVR portal (chattanooga.gov) or emailing stvr@chattanooga.gov, since even recent third-party guides note their info "may not reflect the most current regulations." Comparent