Louisville, KY Airbnb & Short-Term Rental Regulations 2026

Regulation Overview

Kentucky's largest short-term-rental market, driven by Bourbon Trail tourism, the Kentucky Derby and downtown/NuLu demand; investors target both owner-occupied and non-owner-occupied units, but supply is constrained by the metro's 600-foot spacing rule.

Non-owner-occupied STRs, and most STRs in residential zones, need a Conditional Use Permit that must sit at least 600 feet from any other CUP'd STR — a real, enforced density limit even though there is no citywide numeric quota.

Kentucky State Law

State preemption: No state preemption currently in effect. Kentucky Senate Bill 112 (2026 Regular Session), which would bar local conditional-use-permit requirements, density caps, residency requirements, and location/time restrictions on short-term rentals, was introduced 1/21/2026 and remained pending in a Senate committee as of the last recorded legislative action (8/19/2026) — it has NOT been enacted, vetoed, or otherwise resolved as of this research date.

Statewide rules: No statewide STR registration or licensing program exists. Airbnb/VRBO collect and remit Kentucky's 1% statewide transient room tax (KRS 142.400) on behalf of hosts, and since January 1, 2023 these platforms are also required to collect and remit local transient room taxes.

Taxes: Kentucky's 6% state sales tax applies to short-term lodging, plus a 1% statewide transient room tax (KRS 142.400), plus local transient room taxes that vary by city/county.

2025–2026 legislation: SB 112, a broad statewide STR-preemption bill that would void local conditional-use-permit and density-cap ordinances like Louisville's and Lexington's, is pending in the Senate as of September 2026 and has not become law. Its status should be reconfirmed before assuming current local ordinances will remain unchanged.

Louisville Rules

Governing jurisdiction: Louisville/Jefferson County Metro Government (Office of Planning & Design Services); zoning applies metro-wide..

• Louisville requires an annual STR registration with the Office of Planning & Design Services in addition to any Conditional Use Permit.
• A Conditional Use Permit (CUP) is required for non-owner-occupied STRs, and for most STRs of any kind in residential zoning districts.
• New CUP'd STRs must be at least 600 feet from any other STR that already holds a CUP, and a 2023 rule change removed the waiver option once two or more CUP'd STRs already sit within that buffer.
• CUP applications require a mandatory neighborhood meeting and a public hearing before the Planning Commission.
• Owner-occupied STRs pay a lower CUP fee tier than non-owner-occupied (investor) units, according to secondary sources.
• Kentucky Senate Bill 112, still pending as of September 2026, would preempt Louisville's CUP and spacing rules entirely if enacted — investors should track this bill's status.
• Louisville Metro publishes a public GIS dataset of STR CUP parcels and the 600-foot buffer zones, useful for site selection before buying.

Not confirmed

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

• Exact current fee schedule for STR registration and CUP applications (official fee-schedule PDF could not be read).
• Exact local transient room tax rate charged in Louisville.
• Whether a CUP transfers to a new owner on sale or must be reapplied for.
• Occupancy limits and minimum-stay rules, if any.
• Whether/when SB 112 will pass and take effect.

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