Long-term rental of a Montgomery accessory dwelling generally requires multi-family zoning or a use variance, because single-family districts treat accessory living quarters as incidental to the main dwelling. Short-term rentals under 180 nights are subject to a Montgomery business license, the city lodgings tax of 6.5%, the Montgomery County lodging fee of $2.25 per room per day, and the Alabama state lodgings tax of 4% (outside the Mountain Lakes area). Alabama has not preempted local STR rules.
Montgomery does not have a permissive, by-right rental ADU framework comparable to California ADU law. Long-term rental of an accessory unit as a separate tenancy depends on the underlying zoning under Appendix C — single-family districts restrict accessory living quarters to family or domestic-employee use. Short-term lodging operators are governed by the Code of Ordinances and must: (1) obtain a Montgomery business license through the License & Revenue Division; (2) collect and remit the City of Montgomery lodgings tax of 6.5% on gross room receipts for stays under 180 nights; (3) remit the Montgomery County lodging fee of $2.25 per room per day; and (4) register with the Alabama Department of Revenue for the 4% state lodgings tax (Montgomery is outside the Mountain Lakes area where the rate is 5%). Airbnb collects and remits Alabama state and certain local lodging taxes on the host's behalf in many cases, but hosts remain responsible for verifying their full obligation. The underlying zoning use category must also permit transient lodging — generally restricted to commercial and certain mixed-use districts under Appendix C. Operators should consult the Land Use Division before listing. HOA covenants in master-planned communities frequently impose separate STR prohibitions.
Operating an unlicensed STR in Montgomery violates the city's Business License Code, with administrative penalties and back-tax liability. Operating an accessory unit as a rental in a single-family zone violates Appendix C with daily fines under the city's general penalty provisions. The Alabama Department of Revenue pursues separate state lodgings-tax enforcement with interest and penalties on unpaid amounts.
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See how Montgomery's adu rental restrictions rules stack up against other locations.
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