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Is Airbnb legal in Memphis, Tennessee?

Legal with a permit, no owner-occupancy requirement. Under Ordinance 5856 (in force since July 1, 2023), every Memphis STR unit needs its own permit at $300 to apply and $150 a year to renew. The city does not require owner-occupancy and does not limit how many units one person may hold, but enforcement tightened sharply in 2026 after the council found roughly 90% of rentals lacked a permit.

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

Legal with permit

Legal with a permit, no owner-occupancy requirement

Under Ordinance 5856 (in force since July 1, 2023), every Memphis STR unit needs its own permit at $300 to apply and $150 a year to renew. The city does not require owner-occupancy and does not limit how many units one person may hold, but enforcement tightened sharply in 2026 after the council found roughly 90% of rentals lacked a permit.

Permit and costs

Permit
Short-Term Rental Property Permit
Issued by
City of Memphis Division of Planning and Development
Cost
$300 application + $150 / year renewal
Renewal
Annual; expires 365 days after issue; non-transferable

Key limits

Insurance
At least $1,000,000 in liability and hazard insurance coverage is required.
Local contact
A responsible party within about 50 miles must be available 24/7.
Room cap
The ordinance's definition stops at three sleeping rooms, so ask the Division of Planning and Development in writing before buying a four-plus-bedroom house.
Fines
Operating without a permit carries a fine of $50 per day per unit.

Taxes

Occupancy taxes
About 8.5% combined: 3.5% city short-term rental tax plus 5% Shelby County privilege and occupancy tax, plus $2 per bedroom per night
Sales taxes
Tennessee 7% state sales tax plus 2.75% local sales tax in Memphis also apply

Registration checklist

  1. 1
    Assemble the packet
    Prepare a site plan, proof of ownership, $1M insurance, property-tax certification, and a named responsible party.
  2. 2
    Apply on Develop901
    File the permit application through the city's Develop901 portal.
  3. 3
    Pass final inspection
    Complete the final code-enforcement inspection before hosting.

What could change this verdict

Your HOA
HOA and condo covenants can ban STRs even with a city permit, so check them before buying.
Rule changes
Tennessee's Short-Term Rental Unit Act bars the city from banning STRs outright, but the 2026 enforcement crackdown means the permit is now a real requirement.

Sources

Memphis STR guide (2026) · Memphis 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.