Galena, IL Airbnb & Short-Term Rental Regulations 2026

Regulation Overview

Historic river town and one of the Midwest's top weekend-getaway destinations, drawing strong short-term rental demand from Chicago and the Quad Cities for wine-country and antiquing tourism — but the city has capped licenses and closed new entry.

The city has capped the number of vacation rental licenses; all available licenses are currently issued and there is a substantial waitlist with no confirmed timeline for new openings, effectively closing the market to new investors.

Illinois State Law

State preemption: None — Illinois does not preempt local short-term rental regulation; cities and counties set their own rules, resulting in a patchwork of ordinances statewide.

Statewide rules: No statewide STR license or registry. The state's Hotel Operators' Occupation Tax (HOOT) was expanded to explicitly cover STR marketplaces (Airbnb, Vrbo, etc.), effective January 6, 2026; platforms must register with the IL Dept of Revenue to collect and remit the tax.

Taxes: State Hotel Operators' Occupation Tax of roughly 6% of 94% of gross rental receipts (a 5% tax plus a 1% tax), applying to STR platform bookings since January 6, 2026, on top of any local hotel/lodging tax.

2025–2026 legislation: HOOT expansion to STR marketplaces took effect January 6, 2026 (IL Dept of Revenue Publications FY 2025-28 and FY 2026-33).

Galena Rules

Governing jurisdiction: City of Galena (Jo Daviess County); surrounding unincorporated Jo Daviess County is governed by separate county zoning, not city ordinance..

• Galena's Vacation Rental license is capped by City Council action, and per the city's own guidance all available licenses have been issued.
• The waitlist is described by the city as substantial, with no published date for when new licenses will open.
• A Vacation Rental is defined in city code as a dwelling unit or units made available to the public for stays of less than 30 days.
• Vacation rentals require both a special use permit and an operating license, layered on top of standard zoning approval.
• Regulations sit in Galena Code of Ordinances §154.015 (definitions), §154.406(D)(18) (commercial land use) and §154.406(H)(9) (accessory residential use).
• Interested applicants join the waitlist by emailing the city's Zoning Administrator directly, since the process is not fully self-service online.
• Illinois' new statewide Hotel Operators' Occupation Tax obligations for STR platforms took effect January 6, 2026 and apply on top of any local Galena/Jo Daviess County lodging tax.

Not confirmed

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

• Exact license fee amount
• Whether the license transfers on sale of the property
• Occupancy limits and minimum stay specifics
• Penalty amounts for unlicensed operation
• Whether waitlist positions are currently being processed at all

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