Short-term rental rules around New Braunfels

What counts as a short-term rental

In Texas, a short-term rental is a home, condo or room rented for less than 30 days at a time. State hotel tax law treats renting residential property to anyone who isn't a "permanent resident" as a hotel stay, and a permanent resident is someone with the right to stay for at least 30 consecutive days. For tax purposes, a 29-night stay is short-term and a 30-night stay is not.

The City of New Braunfels words it a little differently. Its 2024 short-term rental guide describes a short-term rental as a privately owned home rented to the public for one night up to 30 days, and the Fifth Circuit described the city's zoning rule as covering stays of less than 30 consecutive days. The city says its guide simplifies the code, so for a stay right at 30 days, check Chapter 144 of the city code or ask the city. The guide also says the definition doesn't cover hotels, motels, bed and breakfasts or resort condominiums, which are regulated separately.

Who sets the rules

Three layers decide whether you can rent a specific home by the night. You need all three to say yes.

The city, if the home is inside city limits. Cities can use zoning to allow, limit or ban short-term rentals. Texas counties don't have zoning, so homes in unincorporated areas like much of Canyon Lake and Lake McQueeney aren't subject to it.

The neighborhood's deed restrictions and HOA. These are private rules recorded against the land, and they apply inside or outside city limits.

Taxes. Every short-term stay owes Texas hotel occupancy tax, and some cities, counties and special districts add their own.

New Braunfels city rules

New Braunfels doesn't allow short-term rentals in its residential zoning districts. Owners challenged the ban in federal court, and in June 2026 the Fifth Circuit Court of Appeals upheld it in Marfil v. City of New Braunfels. The court noted that rentals of 30 days or more are still allowed in those districts.

The city's Short Term Rental Interactive Map shows which of three paths a property is on. Some properties only need an STR permit. Some need a zoning change first, called a special use permit (SUP). Homes in residential zoning districts need both a change to their base zoning and an SUP, because the city doesn't allow short-term rentals in residential zoning at all.

The SUP. The city says it takes about three months. It goes to one Planning Commission hearing and two City Council readings, and the city notifies owners within 200 feet by mail, newspaper and a sign. Fees start at $1,750, plus amounts based on acreage and a 3% technology fee. Approval is at City Council's discretion, and if owners of 20% of the surrounding land oppose it, three-quarters of Council has to vote yes.

A base zoning change. Owners can add one to the SUP application, on the same timeline and fees. The city points single-family owners to two non-residential districts that still allow single-family use, C-O (Commercial Office) and MU-A (Low Intensity Mixed-Use). It warns that other districts could cost a home its conforming status.

The STR permit. The application asks for the deed, a site plan showing every parking space, a floor plan with all sleeping areas labeled, commercial liability insurance of at least $500,000 per occurrence, and an owner's agent letter if someone else is applying. The fee is $206. The city then sets up a city hotel occupancy tax account and the owner schedules a fire inspection. After both are done, the owner gets an approval letter, a permit decal and a tenant notification sheet.

Running it. The permit renews every year with updated insurance, another fire inspection and a $128 fee. The city requires a 24-hour contact who can reach the property within 60 minutes and respond to a complaint within an hour, and an evacuation plan posted in each sleeping room. The decal shows the permit number and the 24-hour contact's name and phone number.

The city's official Short-Term Rentals page has the current rules, map and application. Fees and steps above are from the city's January 2024 guide. The city was revising its development code in 2024 and 2025, so confirm with the city rather than relying on an older listing or blog post.

Seguin

In January 2024, Seguin City Council began discussing short-term rental rules, including occupancy limits based on bedrooms and a registration requirement. Check the city's Short-Term Rentals page for what was adopted and how it applies to a specific address.

Canyon Lake, McQueeney and other areas outside city limits

Outside city limits there is no zoning, so the deed restrictions and HOA rules usually decide whether short-term rentals are allowed. Hotel occupancy tax still applies.

Parts of Comal County, including much of the Canyon Lake area, are inside the Water Oriented Recreation District (WORD). It charges a lodging fee on stays of 29 nights or fewer. Airbnb lists it at 3% and collects it on Airbnb bookings.

Many lake homes outside town are on septic. A septic system is designed for a certain number of people, so if you plan to rent to large groups, ask the county whether the system was permitted for that use before you buy.

HOAs, CC&Rs and deed restrictions

In many neighborhoods, the deed restrictions settle the question before the city ever does. Texas courts read these restrictions closely, word for word.

In 2018, the Texas Supreme Court held in Tarr v. Timberwood Park that restrictions limiting a lot to "single-family residence" and "residential purposes" didn't, by themselves, prohibit short-term rentals. The court said its ruling was limited to the language in that case.

In 2022, in JBrice Holdings v. Wilcrest Walk Townhomes, the Texas Supreme Court held that an HOA board couldn't ban short-term rentals by adopting a rule when the recorded covenants didn't allow it. Changing the covenants themselves is a different matter.

Owners can often amend restrictions by the vote the restrictions require. In 2022, an Austin appeals court upheld an amendment in Poole Point v. DeGon, approved by more than two-thirds of lot owners, that set a 180-day minimum rental term. Courts have upheld similar amendments since. That means a neighborhood that allows short-term rentals today can vote to restrict them after you buy.

When you read a neighborhood's restrictions, look for rental or lease minimums (30, 90 and 180 days are common), bans on commercial or business use, occupancy or parking limits, and rental registration rules. Read every recorded amendment, not just the original document. I'm a Realtor, not an attorney, so if rental income matters to your plan, have a real estate attorney review the restrictions.

Hotel occupancy tax

Texas charges a 6% hotel occupancy tax on stays of less than 30 consecutive days, for rooms that cost $15 or more a day. Owners who rent their homes have to collect it from guests, the same as a hotel. The Texas Comptroller handles the state tax. Cities, some counties and special districts like WORD can add local hotel taxes, which they collect themselves.

Booking sites collect some of these taxes on your behalf but not necessarily all of them, and direct bookings are on you. A CPA can tell you what applies to a specific property.

What to check before you buy a home to rent short-term

1. Is it inside city limits? The appraisal district's property record and the city's maps will tell you. Inside New Braunfels, check the city's STR interactive map to see which path the address is on.

2. Ask the city, in writing. Ask whether a short-term rental is allowed at the address, what approvals it needs and whether any existing permit carries over to a new owner. Don't rely on a listing that says "STR allowed."

3. Read the recorded restrictions and every amendment. They're in the county clerk's records. Also get the HOA's bylaws and rules.

4. Get the HOA resale certificate early and ask the association whether any amendment or rule change about rentals is being discussed.

5. Check the septic system if there's no city sewer.

6. Talk to a licensed insurance agent. A home rented to guests often needs different coverage than one you live in. Compare quotes from more than one licensed agent.

7. Talk to a CPA about hotel taxes, income taxes and whether the home can keep a homestead exemption.

Why I pay attention to this

I've run vacation rental units in downtown New Braunfels since 2015, so I know what operating one here involves day to day. If you're looking at a home with rental income in mind, I'll tell you what I know about the neighborhood's restrictions up front, and tell you who to ask, like the city, the HOA or a licensed professional, for anything I can't answer.