Short-Term Rentals in Gillespie County, Texas

Fredericksburg's ordinance: five categories, a homestead-exemption test, and a hard occupancy cap

Every short-term rental inside Fredericksburg city limits needs a city permit, and the ordinance sorts each one into a specific category: STR-Unoccupied (the owner doesn't live there), STR-Accessory (a rental unit on a property where the owner also lives), STR-B&B (bed and breakfast), STR-Facility, and STR-Nonconforming (a pre-existing use that doesn't fit current rules). For the STR-Accessory and STR-B&B categories specifically, the owner has to show a homestead exemption already filed with the Gillespie County Appraisal District -- a concrete, checkable eligibility test tied to the county's own tax records, not just a self-reported claim on the permit application. Occupancy is capped at two guests per bedroom plus two more, but never more than 12 total regardless of the property's size, and the city collects a 13% hotel occupancy tax on top of any state hotel tax.

That's a genuinely detailed, multi-category permitting structure -- more granular than a single blanket STR license -- and it's worth understanding category by category if a specific in-city property is being evaluated for STR use, since the homestead-exemption requirement in particular can disqualify a purely investment property from the STR-Accessory or STR-B&B categories even if it would otherwise qualify.

Outside the city, the picture flips: essentially no county-level regulation

Fredericksburg's ordinance applies only inside the city's own limits -- it does not extend into the city's extraterritorial jurisdiction (ETJ) or the rest of unincorporated Gillespie County, where a large share of the county's actual vineyard-adjacent and Hill Country cabin-style rentals sit. Texas Local Government Code Section 240.102 only grants a county the power to regulate short-term rental units in its unincorporated area if that county has a population of 585,000 or more and is adjacent to a county with a population of 4,000,000 or more. Gillespie County's population -- roughly 28,500 as of the mid-2020s -- is nowhere near either threshold, so the Gillespie County Commissioners Court has no statutory authority to license, cap, or otherwise regulate short-term rentals in the unincorporated county at all.

For a buyer specifically evaluating unincorporated Gillespie County land -- outside Fredericksburg and its ETJ -- for a cabin-rental or guesthouse strategy, this is a real, checkable regulatory gap: no county STR permit, no county-level occupancy cap, no county hotel-tax registration requirement. State-level hotel occupancy tax still applies regardless of location, and a state or federal fair-housing, fire-safety, or life-safety requirement doesn't disappear just because a county-level STR ordinance doesn't exist -- but the specific city categories and the homestead-exemption test described above simply have no equivalent outside city limits today.

Before relying on this for a specific parcel

1. Confirm whether a specific parcel sits inside Fredericksburg city limits, inside its ETJ, or in the unincorporated county proper -- the city's STR ordinance applies only to the first category.
2. If the parcel is inside city limits and the plan depends on the STR-Accessory or STR-B&B category, confirm a homestead exemption is (or can be) filed with the Gillespie County Appraisal District before counting on that category.
3. Don't assume an absence of county-level STR regulation is permanent -- Section 240.102's population thresholds are a state law that could change, and a future legislative session could alter which counties qualify.
4. Check deed restrictions on the specific tract regardless of city/county jurisdiction, since a subdivision's own restrictive covenants can prohibit short-term rental use even where no government-level ordinance does.