Overview - Short-Term Rental Status

Short-term rentals are ALLOWED in Canyon Lake, Texas, but are subject to strict regulations and registration requirements. Canyon Lake operates under two different municipal jurisdictions - some properties fall under the City of Canyon's regulations (which have comprehensive STR rules), while others may be in unincorporated areas of Comal County. The regulatory framework is complex and requires careful compliance with local ordinances.

How to Start a Short-Term Rental Business in Canyon Lake

Step 1: Determine Your Jurisdiction

First, verify whether your property falls under the City of Canyon's jurisdiction or Comal County's unincorporated areas, as regulations differ significantly.

Step 2: Property Registration (City of Canyon)

If your property is within Canyon city limits, you must:

• Complete the short-term rental registration application through Localgov
• Schedule and pass a mandatory safety inspection
• Obtain all required permits before operation
• Pay applicable registration and inspection fees

Step 3: Safety Compliance

Ensure your property meets all safety requirements before applying for permits.

Step 4: Insurance and Tax Setup

• Secure liability insurance (minimum $1 million coverage)
• Register for hotel occupancy tax collection
• Set up monthly or quarterly tax filing system

Step 5: Ongoing Compliance

• Maintain registration annually
• File required tax returns
• Comply with all operational requirements

Required Documents, Permits, Licenses, and Guidelines

Registration Requirements (City of Canyon)

• Short-Term Rental Registration: Required annually through Localgov platform
• Safety Inspection Certificate: Mandatory initial inspection by Canyon Fire Department
• Liability Insurance Certificate: Minimum $1 million per occurrence coverage
• Hotel Occupancy Tax Registration: Required for tax collection and remittance

Required Safety Equipment

Properties must be equipped with:

• Address numbers visible from street (minimum 4-inch tall numbers)
• Operational smoke detectors in all sleeping rooms and immediately outside sleeping areas
• Working carbon monoxide detector (if property uses natural gas or propane appliances)
• Deadbolt locks on doors providing access to dwelling unit, designed to be readily openable from interior without keys
• Fire extinguisher (minimum standard: 1A:10B:C) per floor of dwelling, including finished basements
• Compliance with all applicable city ordinances, including zoning, parking, sanitation, signs, and building/maintenance codes

Guest Information Requirements

Operators must provide guests with an informational brochure containing:

• Operator's 24-hour contact information
• Neighborhood information including parking restrictions, noise restrictions, and trash collection schedules
• Emergency contact information (police, fire, emergency medical services)
• Instructions for obtaining severe weather and disaster alerts
• Life safety equipment information

Specific Regulations for Short-Term Rentals

City of Canyon Regulations (Ordinance No. 1198)

Definition

• Short-Term Rental: A dwelling unit rented for less than 30 consecutive days, including single-family units, duplexes, tri-plexes, four-plex units, multi-family units, mobile homes, townhomes, or condominiums

Tax Requirements

• Local Hotel Occupancy Tax Rate: 7% of total occupancy cost
• State Hotel Occupancy Tax Rate: 6% of occupancy cost
• Filing Deadlines:
  • Monthly filing required for properties owing more than $500/month or $1,500/quarter
  • Quarterly filing allowed for properties owing less than $500/month or $1,500/quarter
  • All taxes due by 20th business day of month following collection period

Operational Requirements

• Permit Display: Approved short-term rental permit must be posted conspicuously inside front entrance
• Building Compliance: Property must maintain compliance with applicable building and fire codes
• Tax Collection: Operators must collect and remit hotel occupancy taxes as required
• Insurance: Host protection or liability insurance with minimum $1 million per occurrence coverage required

Registration Fees (Established in City Fee Schedule)

• Application and renewal fees
• Safety inspection fee
• Safety re-inspection fee (if initial inspection fails)
• Technology fee

Permit Denial and Revocation Conditions

Permit May Be Denied If:

• Application statements are incomplete, inaccurate, misleading, or false
• Operator has not paid all required fees
• Operator had a permit revoked within preceding 18 months
• Violations of city ordinances or applicable laws occurred

Permit May Be Revoked For:

• Non-compliance with permit conditions or city ordinances
• False or misleading application statements
• Three complaints from neighboring property owners for excessive noise or traffic within 24-month period
• Property poses serious threat to public health, safety, or welfare
• Failure to remit hotel occupancy tax

Appeals Process

• Appeals must be submitted in writing within 5 business days of denial or revocation
• Appeals heard by Planning and Zoning Commission
• Appeals must be received at least 30 days prior to scheduled commission meeting

Violations and Penalties

• Operating without permit is unlawful
• Violations punishable as provided in City Code Section 2.08.096
• Failure to pay hotel occupancy taxes may result in permit revocation
• Operators have 30 days from delinquency notice to submit taxes before revocation proceedings begin

Contact Information for Local Authorities

City of Canyon Planning and Development Office

• Phone: (806) 655-5000, Option 6
• Email: planning@canyontx.gov
• Purpose: Short-term rental registration, safety inspections, permit applications

City of Canyon Fire Department

• Email: planning@canyontx.gov (for scheduling safety inspections)
• Phone: (806) 655-5000, Option 6
• Purpose: Required safety inspections for STR registration

Localgov Customer Service (Tax Filing Platform)

• Phone: (877) 842-3037
• Email: service@localgov.org
• Website: https://tax.localgov.org/login
• Purpose: Hotel occupancy tax registration, filing, and payments

City of Canyon General Information

• Address: 301 16th Street, Canyon, TX 79015
• Phone: (806) 655-5000
• Fax: (806) 655-5025

Source Links

• City of Canyon Hotel Occupancy and Short Term Rental Tax Info
• City of Canyon Official Website
• STR Profit Map Canyon Lake Regulations
• Blue Collar Commercial Group Canyon Lake STR Guide

Important Note: The regulatory environment for short-term rentals can be complex, particularly regarding jurisdictional boundaries between the City of Canyon and Comal County. Properties in different areas may be subject to different regulations. It is strongly recommended that investors verify the specific regulations applicable to their property location and consult with local authorities before making investment decisions or beginning operations.