Bozeman, MT Airbnb & Short-Term Rental Regulations 2026
Everything you need to know about operating a legal short-term rental in Bozeman, Montana. Licensing, taxes, zoning, and 2026 compliance requirements.
Bozeman STR Regulation Overview
Bozeman is one of the toughest STR markets in the Mountain West for outside investors. Driven by a housing crunch tied to explosive growth and proximity to Yellowstone and Big Sky, the city moved in late 2023 (Ordinance 2149) to end new non-owner-occupied (Type 3) rentals citywide, then overhauled its entire Unified Development Code (Ordinance 2151) effective February 1, 2026, further tightening where STRs can operate. Today STRs are sorted into Type 1 (renting rooms while the host is present), Type 2A (renting an entire primary residence while away), Type 2B (an ADU or second unit on the host's lot), and Legacy Type 3 (the grandfathered investor permits). Every operator needs a city hosting permit (recently raised to roughly $325/year), a Montana Public Accommodations license, and fire and health inspections. The practical takeaway: the path to a legal Bozeman STR runs through your own primary residence or a legacy permit. For house-hackers and owner-occupants the market remains attractive given strong summer demand, but pure-investment buyers face a near-closed door inside city limits.
Bozeman STR Quick Facts
| STR Legal? | Yes |
| License Required | Yes |
| License Cost | Approximately $325/year (recently increased from $250); confirm the current figure with the City |
| Lodging Tax | 8% state lodging tax (4% Lodging Facility Use Tax + 4% Lodging Sales Tax) |
| Occupancy / Density Caps | No citywide numeric cap on the total number of STRs, but occupancy is limited to 2 guests per sleeping area/bedroom, and Type 3 (non-owner-occupied) STRs are effectively frozen at the legacy count after the 2023 ban. |
| Primary Residence Required | Yes |
Four STR categories define what's allowed
Bozeman classifies rentals as Type 1 (rooms rented with the host present), Type 2A (whole primary residence rented while the host is away), Type 2B (an ADU or second unit on the same lot/building as the host's home), and Legacy Type 3 (grandfathered non-owner-occupied permits). New stand-alone investment STRs no longer fit any approvable category in residential zones.
City hosting permit required and renewed annually
Operators must obtain a City of Bozeman STR hosting permit, valid for one year and renewed annually. The annual fee was historically $250 and has reportedly been raised to about $325; confirm the current amount with the City's Community Development Department. A Montana Public Accommodations license and fire/health inspections are also required.
70% primary-residence rule
For permit types that require it (Types 1 and 2A), the owner must occupy the property as their primary residence at least 70% of the calendar year. Properties not occupied by the host for that threshold are ineligible for those STR types.
Ordinance 2149 banned new Type 3 rentals
Bozeman prohibited new Type 3 (non-owner-occupied) short-term rentals (city vote in October 2023). Existing compliant Type 3 operators may continue as 'Legacy Type 3' only while their hosting permit stays active and code-compliant; let it lapse and the right is lost.
2026 UDC reshaped STR zoning
Effective February 1, 2026, Bozeman's new Unified Development Code (Ordinance 2151) merged the former RS, R-1, and R-2 districts into a single RA district. In RA, only Type 1 STRs are permitted and new Type 2 STRs are generally no longer allowed, though a text amendment to re-permit Type 2 in RA was under consideration in 2026.
State licensing and inspections
Beyond the city permit, hosts need a Montana Public Accommodations license issued by the state after a Gallatin City-County Health Department inspection, plus a fire safety inspection. Occupancy is capped at two guests per sleeping area.
Bozeman STR Market Performance
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Frequently Asked Questions
Yes, but only in regulated forms. Bozeman allows Type 1 (host-present room rentals), Type 2A (primary residence rented while away), and Type 2B (an ADU on the host's lot). New non-owner-occupied Type 3 investment rentals have been banned since 2023, except for grandfathered legacy permits. The new Unified Development Code effective February 1, 2026 further limited Type 2 STRs in the consolidated RA residential district.
Yes. You need a City of Bozeman STR hosting permit, renewed annually. The fee was historically $250 and has reportedly increased to around $325, so verify the current amount with the City. You also need a Montana Public Accommodations license issued by the state after a Gallatin City-County Health Department inspection, plus a fire safety inspection. Operating without these permits can result in penalties and revocation.
Generally no, not inside city limits. Since the 2023 ordinance, new non-owner-occupied (Type 3) STRs are prohibited in residential zones, and the 2026 UDC further restricted Type 2 STRs in the new RA district. Legal STRs must generally be tied to your primary residence, where you live at least 70% of the year, or be an existing legacy Type 3 permit. Pure investment STRs are mostly limited to non-residential zones or the county.
Montana imposes a 4% Lodging Facility Use Tax and a 4% Lodging Sales Tax, totaling 8% on accommodations under 30 nights. Montana has no statewide general sales tax, and Bozeman has no general city sales tax or local resort tax (resort taxes apply only in designated communities like Big Sky and West Yellowstone). Hosts must still register, collect, and remit the lodging taxes and hold a state Public Accommodations license.
Bozeman limits occupancy to a maximum of two guests per sleeping area or bedroom. There is no citywide cap on the total number of permits, but the 2023 Type 3 ban effectively froze the number of non-owner-occupied rentals at the existing legacy count, and zoning restricts where Type 2 and Type 3 units can operate.
Informational only — verify current rules with local authorities before investing. Sources: www.bozemanmt.gov · www.avalara.com · revenue.mt.gov · www.bozemandailychronicle.com · www.checkmaterentals.com
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