Nashville DADUs may be rented for long-term residential use only when the owner occupies the other unit on the property. Short-Term Rentals are regulated under Metro Code Section 6.28, which distinguishes Owner-Occupied (Type 1) from Non-Owner-Occupied (Type 2) STR permits. Only Type 1 STR permits are allowed in residential zones, restricting DADU STR use to owner-occupied properties.
Nashville Short-Term Rental regulations under Metro Code Chapter 6.28 limit non-owner-occupied STR permits (Type 2) to commercial and mixed-use zones, prohibiting them in standard residential districts. DADUs in residential zones can be used as STRs only when the property owner occupies either the main house or the DADU and the STR is registered as Type 1 (Owner-Occupied). Long-term rentals (30 days or more) of a DADU are permitted as long as the owner-occupancy rule under Section 17.16.250 is met. STR permits require annual renewal, $313 application fee, $50,000 liability insurance, sales/occupancy tax registration with the State of Tennessee, and posting the permit number in all listings. Davidson County levies hotel/motel tax (5.5%) and state sales tax (9.25%) on STR revenue. Type 2 STR permits issued before 2018 in residential zones are grandfathered but lapse upon ownership transfer.
Operating an unpermitted STR in Nashville carries fines up to $50 per day. Booking platforms (Airbnb, VRBO) face penalties for listing unregistered units. Loss of owner-occupancy converts a Type 1 permit to a violation, triggering revocation. Tax non-compliance creates separate Tennessee Department of Revenue enforcement. Both-units-rented DADU configurations violate Code 17.16.250.
Nashville, TN
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