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Is Airbnb legal in Chattanooga, Tennessee?

Investor STRs restricted to commercial zones with a $500 permit. Chattanooga requires a Short-Term Vacation Rental certificate from the Land Development Office under Ordinance 13981. Absentee (non-owner-occupied) certificates cost $500 to apply and $500 a year to renew, and they are limited almost entirely to commercial zones or parcels of 20 or more acres, with a 25% density cap in multifamily buildings.

Showing the researched rules for Chattanooga, TN below. Type your Chattanooga address to jump to the verdict.

Legal with permit

Investor STRs restricted to commercial zones with a $500 permit

Chattanooga requires a Short-Term Vacation Rental certificate from the Land Development Office under Ordinance 13981. Absentee (non-owner-occupied) certificates cost $500 to apply and $500 a year to renew, and they are limited almost entirely to commercial zones or parcels of 20 or more acres, with a 25% density cap in multifamily buildings.

Permit and costs

Permit
Short-Term Vacation Rental (Absentee) Certificate
Issued by
City of Chattanooga Land Development Office
Cost
$500 application + $500 / year renewal (non-refundable)
Renewal
Annual; renew at least 30 days before expiration

Key limits

Commercial zoning only
Absentee rentals are allowed only in commercial and mixed-use districts that permit hotels, or on residential parcels of 20 or more acres with common ownership.
Density cap
STVRs cannot exceed 25% of total units in a multifamily property.
Local contact
A local contact must be reachable by phone at all times and able to arrive at the rental within 2 hours.
Bedroom max
The maximum number of bedrooms allowed for an STR is five.

Taxes

Occupancy tax
8% combined: 4% City of Chattanooga plus 4% Hamilton County
Sales taxes
Tennessee 7% state sales tax plus about 2.25% local sales tax also apply

Registration checklist

  1. 1
    Verify commercial zoning
    Confirm eligibility through the Hamilton County GIS map before buying, since most residential blocks do not qualify.
  2. 2
    Get a business license
    Obtain a City of Chattanooga business license as part of the application packet.
  3. 3
    Apply with plans
    File the application with a site and floor plan, a homeowners insurance declaration page, and a posted emergency escape plan.

What could change this verdict

Your HOA
HOA and condo rules can ban STRs even where city zoning allows them, so check the governing documents.
Rule changes
A property-rights coalition has sued over the absentee rules, and since January 1, 2026 the certificate must be physically posted in the unit, so the framework is in motion.

Sources

Chattanooga STR guide (2026) · Chattanooga STR regulation overview

Rules researched October 2026. They change, so verify with the city before you buy.

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Verify before you buy. Rules change often and vary by zoning, HOA, and building type. This is a research starting point, not legal advice. Always confirm with the city's planning or business-license office before signing anything.