Short-Term Rentals in Chattanooga, TN: What Residents Actually Need to Know
If you live in Chattanooga or are thinking about moving there, short-term rentals are one of those things you probably won't think about until they affect you directly. Chattanooga has 7 specific rules on the books covering different aspects of short-term rentals, and some of them might surprise you.
Primary-Residence-Only Rule
Chattanooga divides short-term rentals into Type 1 (owner-occupied primary residence) and Type 2 (non-primary). Type 1 is permitted broadly in residential zones; Type 2 faces stricter zoning limits citywide under Chapter 38.
Key details: Primary residence threshold: 185 days per year. Code chapter: Chapter 38. State preemption: TCA 13-7-602. Type 2 status: Stricter zoning limits.
Operating a non-primary residence as Type 1 risks permit revocation, fines starting at 50 dollars per day, and reclassification as illegal Type 2.
Compared to other cities, Chattanooga takes a harder line on primary-residence-only rule. The enforcement and penalty structure reflects that.
Occupancy Limits
Chattanooga caps short-term rental occupancy at two adults per bedroom plus two additional, with absolute maximums tied to Type 1 versus Type 2 status under Chapter 38.
Key details: Per-bedroom cap: Two adults. Plus base: Two additional adults. Daytime multiplier: Up to 2x overnight. Posting required: Inside unit and listing.
Exceeding the posted cap can trigger 50 dollar fines escalating per night and accumulate toward the strike count that revokes the permit.
Insurance Requirements
Chattanooga requires every short-term rental operator to carry liability insurance and submit proof at permit application, ensuring coverage against guest injury claims under Chapter 38.
Key details: Typical minimum: 500,000 dollars per occurrence. Proof required: Certificate of insurance. Homeowner policies: Usually insufficient alone. Renewal cadence: Annual.
Lapsed or missing insurance is grounds for permit suspension, denial of renewal, and personal liability for any incident during the lapse.
Permit Requirements
Chattanooga regulates short-term vacation rentals (STVRs) under Article XVII of the zoning code. A two-tiered system distinguishes homestays (owner-occupied) from absentee rentals, with specific zone allowances for each.
Key details: Max Bedrooms: 5 bedrooms maximum. Definition: Rented for up to 30 days. Tiers: Homestay (owner-occupied) vs. Absentee. Penalty: Up to $500/day for violations.
Operating without proper registration results in fines up to $500 per day from an administrative hearing officer.
Compared to other cities, Chattanooga takes a harder line on permit requirements. The enforcement and penalty structure reflects that.
Parking Rules
STVR guests in Chattanooga must follow city parking regulations. Operators should provide parking information, especially in the downtown and North Shore areas where parking is limited.
Key details: Downtown: Metered and time-limited parking. Neighborhoods: Permit zones may apply. Blocking: No blocking driveways or hydrants. Best Practice: Provide parking info to guests.
Illegally parked vehicles receive tickets and may be towed. Downtown violations carry higher fines.
Noise Rules
STVR guests in Chattanooga must comply with the city's noise ordinance. Operators are responsible for informing guests about noise rules and responding to complaints.
Key details: Applies: City noise ordinance applies to guests. Responsibility: Operator must inform guests. Hearing: Administrative hearing for violations. Max Fine: Up to $500/day.
Guests may receive noise citations. Repeated incidents may result in STVR enforcement action including fines.
Taxes & Fees
Chattanooga STVR operators must collect and remit the Hamilton County hotel/motel tax and the Tennessee state sales tax on accommodation. The combined rate is approximately 12-15%.
Key details: State Sales Tax: 7% Tennessee state rate. County Tax: Hamilton County hotel/motel tax. Combined: Approximately 12-15% total. Platforms: Airbnb collects TN taxes automatically.
Failure to collect or remit taxes results in penalties and interest from both local and state tax authorities.
This is not one of those rules that cities tend to ignore. Chattanooga actively enforces its taxes & fees requirements.
The Bottom Line
Chattanooga is tougher than many cities when it comes to short-term rentals. Out of the 7 rules covered here, 3 are rated strict. If you are a homeowner, renter, or business owner in Chattanooga, take the time to understand these requirements before they become a problem. Most violations come with fines, and some repeat violations can escalate.
All of the above reflects Chattanooga's municipal code as of our last review. If you need specifics on fines, exemptions, or filing requirements, the detailed ordinance pages linked above have the full breakdown.