Airbnb had more than 300 Louisville listings as of Aug. 22. | Courtesy of Airbnb website
Airbnb had more than 300 Louisville listings as of Aug. 22. | Courtesy of Airbnb website

A new city ordinance that requires property owners to register for a permit before renting out their homes on websites such as Airbnb took effect on Aug 1.

However, only 19 Louisville residents had applied to obtain a permit as of Friday, according to Louisville Metro Planning and Design Services.

As of Monday, the popular short-term home rental website Airbnb listed 306 homes as available. Similar sites HomeAway and Vacation Rentals by Owner both listed 243 homes.

While it’s unclear how many of these listings overlap, it is apparent that only the slightest minority of Louisville residents who rent out their houses have applied for the necessary permit.

Joe Reverman, assistant director of Planning and Design Services, said the office has received several calls a day asking questions about how to apply. He did not have any explanation as to why so few people have submitted short-term rental applications so far.

Louisville passed the new ordinance, dubbed the Airbnb ordinance, earlier this year. The ordinance classifies a short-term rental as a dwelling where someone stays for less than 30 consecutive days but does not include hotels, motels, bed and breakfasts, or boarding houses.

According to the ordinance, any existing short-term renters — people who have rented in the past and plan to do so in the future — must submit a permit application to Planning and Design Services within 90 days of the ordinance taking effect. That makes the deadline Oct. 28 in order to continue renting out a property or properties.

How to Pay Taxes on Short-Term Rentals

Once a short-term rental permit is approved, the permit holder can start renting out a property, but he or she must remit 8.5 percent in room taxes to the Louisville Metro Revenue Commission. For example, if a host earns $1,000 from short-term rentals in a year, the person must pay $85 in taxes.

According to the revenue commission, short-term renters must register here. Once registered, they will receive an account number that can be used to remit taxes online via the commission’s website. Unlike hotels and large rental businesses, short-term renters will be asked to remit their taxes once a year when they file all their other tax forms and use the OL-3 tax form. For additional help, residents can call (502) 574-4860.

Although media outlets including Insider Louisville have written multiple stories about the new ordinance, the application process and who is allowed to offer short-term rentals is still confusing. Below, IL offers some key information short-term renters need to know before applying for a permit.

How to Obtain a Permit, What Happens if You Don’t

First off, those who risk renting without the proper permit will get a warning from the city for the first offense. The second offense could cost up to $500, and three-time offenders could pay up to $1,000, according to the ordinance.

Short-term renters must apply for and receive the permit before they rent out a property. In a document addressing frequently asked questions, Planning and Design Services says applicants should hear from a Develop Louisville staff member within 10 days of submitting their applications.

Renters must fill out an application for each individual property; the application can be found here. Applicants can submit their application and a $25 annual fee in person or through the mail at 444 S. Fifth St., or through email. Reverman said applicants should call (502) 574-4860 to obtain a staff member’s email address; most national banking companies allow customers to send money via email or mobile phone. Develop Louisville also is working on an platform where people will be able to submit applications and pay the fee online.

Each application requires residents to provide the address of the short-term rental property; the contact information for the property owner and short-term rental host; an emergency contact if there is a maintenance or safety concern; the $25 annual fee; and the primary parcel ID number.

Residents can find the parcel ID number by searching this online map. Simply enter the property address and then click “Land Development Report” when an information box pops up. The ID number is the first item listed.

People also can use the map tool to find out what zoning a property is classified under because the application process varies for different zoning classifications.

  • If someone wants to rent out a property that is zoned residential such as R-E, R-2 or U-N, the property must be their primary residence. If the person doesn’t live at the address full time, he or she must apply for a conditional use permit.
  • Office and commercial properties only require a short-term rental permit. It doesn’t matter if someone lives there full time or not. Qualifying zoning classifications include OR, OR-1, OR-2, OR-3, OTF, C-N, C-R, C-1, C-2, C-3, C-M, W-1, W-2, PVD, PTD or PRD.
  • If a property is located in the Old Louisville-Limerick Traditional Neighborhood Zoning district, the owner must apply for a conditional use permit whether they live there or not.
  • Property owners in the following cities currently cannot rent at all: Anchorage, Douglass Hills, Graymoor-Devondale, Hurstbourne, Indian Hills, Jeffersontown, Lyndon, Middletown, Prospect, Shively, St. Matthews and St. Regis Park. Because of rules set up during the merger of Louisville and Jefferson County, those cities set their own zoning regulations and would need to pass their own “Airbnb” ordinance in order to allow and regulate short-term rentals. (However, many rentals in these neighborhoods still can be found via Airbnb.)

Click here for additional information on how to apply for a conditional use permit. The process is more complicated, so you’re best bet is to call Planning and Design Services at (502) 574-4860.

Bad news for anyone whose property requires a conditional use permit: Fees associated with the permitting process can cost as much as $1,155.50, according to information from Planning and Design Services. The high rate could deter many short-term renters, particularly in the Old Louisville and Limerick neighborhoods.

People who live in condominiums or are part of a homeowners association should consult the condominium or association bylaws to make sure short-term rentals are not prohibited. Renters also should check with their landlord before applying for a short-term rental permit.

For more information, check out Planning and Design Services’ dedicated short-term rental webpage or call (502) 574-4860.

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Louisville native Caitlin Bowling has covered the local restaurant and retail scene since 2014. After graduating from the Ohio University’s E.W. Scripps School of Journalism, Caitlin got her start at a newspaper in the mountains of North Carolina where she won multiple state awards for her reporting. Since returning to Louisville, she’s written for Business First and Insider Louisville, winning awards for health and business reporting and becoming a go-to source for business news. In addition to restaurants and retail business, Caitlin covers real estate, economic development and tourism. Email Caitlin at [email protected]


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