Lexington Short-Term Rentals: Registration Rules Rules (2026)

Lexington treats short-term rentals (rentals of fewer than 30 consecutive days) as a distinct land use under the LFUCG Zoning Ordinance. Hosts must first determine whether their property is in a zone that permits STRs by right, by conditional use, or not at all. Owner-occupied STRs generally face fewer hurdles than non-owner-occupied whole-home rentals, which typically require a conditional use permit from the Board of Adjustment in most residential zones. Once zoning approval is secured, the operator must register with the LFUCG Division of Revenue and remit the combined transient room tax (state 1 percent plus local components totaling approximately 8.5 percent) on all rental receipts. Platforms such as Airbnb and Vrbo collect and remit the state portion, but hosts remain responsible for confirming local remittance. Parking requirements, occupancy limits tied to bedroom count, and rules against commercial events are typical conditions attached to STR approvals. Fire and building code compliance is verified through the application process, and properties must have working smoke alarms and carbon monoxide detectors as required by Kentucky law. Operating without proper registration can trigger zoning enforcement fines and back tax liability. The Bluegrass region has specific tourism draws (Keeneland, Kentucky Horse Park, Rupp Arena, UK sports) that make STR demand strong, but LFUCG has tightened enforcement in recent years in response to neighborhood concerns.