Airbnb Host Taxes in Houston, Texas - 2026

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in Houston, Texas

Houston’s diverse attractions, from the Space Center to its vibrant culinary scene, make it a popular destination for travelers, creating a robust market for Airbnb hosts. However, alongside the potential for income comes the responsibility of understanding and fulfilling tax obligations. Rental income generated through platforms like Airbnb is generally taxable at both the federal and state levels, and proper record-keeping is crucial for maximizing deductions and ensuring compliance.

Texas State Tax Rules for Rental Income

The big perk in the Lone Star State is no personal income tax. However, be aware of the Texas Franchise Tax. While it has a high threshold (over $1.2 million in revenue) that rarely applies to solo gig workers operating an Airbnb, it's a key part of the state's business tax structure. Airbnb hosts in Houston, even those operating on a small scale, should understand this potential obligation as their business grows. Texas does not have a state-level tax specifically targeting short-term rental income beyond the standard business tax framework. However, local jurisdictions, like the City of Houston, may impose hotel occupancy taxes (HOT) or similar fees on short-term rentals. It’s vital to check the City of Houston’s regulations regarding short-term rentals to ensure compliance with local tax requirements. Consider factors unique to Houston, such as parking availability impacting guest satisfaction and demand fluctuations tied to events at the NRG Stadium or the Texas Medical Center. Accurate record-keeping of all income and expenses is essential, even in the absence of a state income tax, to properly calculate any applicable franchise tax or local occupancy taxes. Resources are available through the Texas Comptroller’s office to help understand these obligations: Texas Comptroller of Public Accounts.

The Critical Tax Question: Are You a Business or a Rental?

This is the most important tax question for an Airbnb host, as it determines if you owe self-employment tax. The IRS classifies rental activities differently, impacting your tax liability.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Passive Income) and are exempt from Self-Employment Tax. This applies if you only provide basic lodging and cleaning between guests. Think of it as simply providing a space for someone to stay.
• Schedule C (Active Business Income): However, if you provide "substantial services" (daily cleaning, meals, providing toiletries beyond basic soap, concierge services), you report on Schedule C and must pay the 15.3% self-employment tax. This is because the IRS views this as operating a business, not just renting property.

Top Tax Write-offs for Houston, Texas Hosts

• Platform Fees: Fees from Airbnb, VRBO, etc., are fully deductible. These are considered expenses directly related to generating rental income.
• Mortgage Interest & Property Taxes: Deduct the portion of mortgage interest and property taxes corresponding to the rental space and the period it was rented. For example, if your property was rented 50% of the year, you can deduct 50% of these expenses.
• Repairs, Maintenance & Cleaning: Deduct costs for fixing items (leaky faucets, broken appliances), professional cleaning services, and cleaning supplies. Routine maintenance is deductible; major improvements that increase the property's value are depreciated.
• Depreciation: A powerful but complex deduction for wear and tear on your property. It allows you to deduct a portion of the property's cost over its useful life. Often requires a tax professional to calculate correctly.