Duluth, MN Airbnb & Short-Term Rental Regulations 2026

Regulation Overview

Lake Superior port city and gateway to Minnesota's North Shore, one of the state's hottest leisure-travel markets; the city runs a capped lottery system for non-owner-occupied vacation rentals with no new openings expected.

Non-owner-occupied vacation rentals require a capped Interim Use Permit allocated by lottery; the waitlist is currently closed to new entrants, with the city stating no opening is expected in the foreseeable future — effectively a ban on new non-owner-occupied STR investment.

Minnesota State Law

State preemption: None — Minnesota has no statewide STR license, permit, or registry, and no state law preempts a city or county from regulating short-term rentals through zoning or licensing; each city sets its own ordinance.

Statewide rules: No statewide STR license. State sales tax of 6.875% applies to stays under 30 days; there is no separate statewide lodging tax, but counties, cities, or special districts commonly add their own local lodging tax (often 3%-5%).

Taxes: 6.875% state sales tax + local sales tax + local lodging tax (commonly 3%-5%, varies by city/county).

2025–2026 legislation: No statewide STR preemption bill identified as passed; the legislature has generally defended local zoning authority in recent sessions rather than curtailing it — VERIFY current session activity.

Duluth Rules

Governing jurisdiction: City of Duluth.

• Duluth caps the number of non-owner-occupied vacation rental (Interim Use) permits citywide and allocates new spots via a periodic lottery among applicants on a Letters-of-Interest waiting list.
• Following the most recent (2024) lottery, the city's own Interim Use Permit page states there is no opening expected on the waitlist 'in the foreseeable future.'
• Owner-occupied home-share hosts (living on-site) have a much easier, effectively uncapped registration path, in sharp contrast to the capped path for pure investment (non-owner-occupied) rentals.
• The full non-owner-occupied vacation rental license fee was raised from $621 to $1,600/year, with half the increase directed to the city's Housing Trust Fund to support affordable housing.
• A limited-use vacation dwelling permit — allowing a capped number of rental days per year — costs $250/year, also with half directed to the Housing Trust Fund.
• The separate Interim Use Permit application itself carries a $2,500 fee, on top of the annual license fee once approved.
• Duluth serves as the primary gateway to Minnesota's North Shore of Lake Superior, a major regional leisure-travel corridor, which is a key driver of why the city capped supply amid housing-affordability concerns.

Not confirmed

We could not verify the following against a primary source. Confirm each with the jurisdiction before you rely on it:

• Exact current numeric cap figure (sources cited a range of roughly 60-120 with slow annual growth)
• Duluth's local lodging tax rate
• Occupancy limits and minimum stay length
• Whether an Interim Use Permit transfers on sale of the property (particularly important given the capped/lottery system)

Buyer Due Diligence Checklist

Before you write an offer on a short-term rental here:

• Get a written determination from the governing jurisdiction for the specific parcel. Verbal guidance from anyone else is not diligence.
• Establish which jurisdiction governs — city, town, village and unincorporated county can differ sharply within a few miles.
• Ask whether an existing permit transfers on sale. In many markets it does not, and a listing marketed as a running short-term rental may convey nothing of the sort.
• Read the HOA or condo covenants during your inspection period. Private covenants bind even where the jurisdiction permits the use.
• Model revenue against the legal occupancy cap, not the bedroom count.

Frequently Asked Questions