Rental Rules by City / Free checklist / Lexington

Is my Lexington rental legal? Checklist

Fayette County, Kentucky · Based on our Lexington page, last verified Oct 24, 2026 · Print

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📋 The Basics

Can I rent my place short-term here?: Yes, with a license or tax registration
Do I need a permit?: Yes, with a zoning permit and a yearly Special Fees License.
What taxes do I pay?: Total about 15.5%. Check your Airbnb payout report to see which ones Airbnb collects; you pay the rest yourself.

Your 3 steps to be legal

Get the Zoning Compliance Permit.
Get a business license and Special Fees License.
Carry $1M liability insurance.

⚠️ Biggest risk: Renting without the Special Fees License (up to $500/day).

Words confusing? See the glossary. Details and official sources are below.

This is the general rule for Lexington. Does your address qualify?

The free info covers the city as a whole. Your property can still be different: zoning can change from one street to the next, and an HOA or condo ban can stop rentals even where the city allows them. The penalties Lexington lists are on the Lexington page.

Your $49 Compliance Check looks at your exact property:

Whether your exact address and zone allow short-term rentals
A check of HOA / condo rental restrictions to look for
Which permits and tax accounts you personally need
What you're missing right now
A personal report with clear next steps and official sources, by email
A refund if we report a rule in error (refund policy)

🔎 How we check: official city, county and state sources, a last-verified date on every page, and nothing guessed. Learn more

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Rules don't change every week, but they do change, and nobody emails you when they do. We'll alert you when city rules, tourist taxes, HOA-related laws, or Airbnb/Vrbo policies change in Lexington. Cancel anytime.

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Permit / license / registration

Licenses: Occupational business license plus an annual Special Fees License: $200 first unit, $100 each extra unit.
Insurance: $1,000,000 liability insurance, site and floor plan, safety affidavit.
Hosted vs un-hosted: Hosted STRs must prove a permanent resident lives there. Unlicensed STRs face fines up to $500/day.

Zoning, where allowed & definitions

Zoning: Zoning Compliance Permit from the Division of Planning.

Night limits, minimum stays & occupancy

Not listed on our page: Verify with the city/county before renting.

Fees, penalties & pending changes

Not listed on our page: Verify with the city/county before renting.

Taxes & who collects them

Register / account for Kentucky state sales tax (6%)
Register / account for Kentucky statewide transient room tax (1%)
Register / account for Lexington transient room tax (8.5%)
What Airbnb collects: Verify in payouts which Kentucky and Lexington taxes Airbnb remits.
Vrbo and direct bookings: check which taxes Vrbo collects in your area; for direct bookings you collect and remit all of them yourself.

Total rate: 15.5%. 15.5% (KY 6% sales + 1% state room tax + 8.5% local room tax, due the 20th of the next month). Calculate.

HOA / condo check

Read your declaration, bylaws and rules for rental bans, minimum terms, caps and approval requirements.
Get any association sign-off or approval letter your city or association requires.
See our HOA & condo guide.

Insurance

Confirm your homeowner/condo policy covers short-term rental use, or add a short-term rental policy. Platform host protection is not a substitute for insurance.
Ask your association whether it requires specific liability coverage.

Deadlines

Renew city/county permits or registrations on their schedule (often annually): confirm the date with the office that issued it.
File state and local lodging tax returns on the schedule your tax office assigns.

Official sources

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Not legal or tax advice. Last verified Oct 24, 2026. Rules and rates change: confirm with the official sources linked before you rent or file.