Navigating Philadelphia Airbnb Rules in 2025: Short-term Rental Laws

Philadelphia short-term rentals are no longer a thing of the past. And by past, I mean way before the early centuries when the concept of “inns” was the hot new thing. In recent decades, short-term rentals have become a smart way for homeowners to earn passive income.

But that’s not how it works, is it? We have something called a government that puts rules and regulations on how to drink water. So, how would they leave this business model alone? But when you view this reality check from outside the rose-tinted glasses that is the short-term rental system, some laws are needed.

Philly is no different from the concept of Airbnb. However, each state has specific regulations that govern how these short-term rental spaces function and for how long. Here’s how to navigate Philadelphia Airbnb laws in 2025 as a host.

Can I Airbnb My House in Philly?

The answer is YES. You can rent out your house in Philly on platforms like Airbnb, but you must comply with the city’s short-term rental laws. Here is what you need:

Obtain A Commercial Activity License (CAL)

• This is required for any business license in Philly and is free of charge.

• You can apply for it online or in person at the Permit Center.

Determine Your Rental Type

• If, as the host, you plan on living at the property you are renting out for 30 days or less, that is called limited lodging.

• If you don’t live at the property you are renting, that is known as visitor accommodation.

One of our coworkers invested in visitor accommodation and explained the difference between these rental types.

“My wife’s old apartment was just sitting empty. We decided to take advantage of the visitor accommodation and turned it into a short-term rental stay. As long as we followed Philly’s regulations, we were in the clear and enjoyed consistent passive income”.

Secure The Appropriate Zoning Permit

• For hosts residing at the property, you need something called the Limited Lodging Use.

• For hosts not residing at the property the zoning permit is called the Visitor Accommodation Use. As of 2025, the fee is $250.

As a host, you must ensure that the property complies with the local zoning laws to avoid fines and legal complications.

Obtain The Necessary Rental License

• A Limited Lodging Operator License is needed if you live at the property. As of 2025, the fee is $150.

• A Rental License with Hotel Designation is needed if you don’t live at the property.

Secure Insurance Coverage

• You must obtain liability insurance that exceeds or meets the $500,000 minimum coverage requirement.

Register for A Business Tax account

• As a host, you will need A Philadelphia Business Income and Receipts Tax (BIRT) account to handle the applicable taxes.

• Collect and remit the city’s 8.5% Hotel Tax from your guests.

• Airbnb often automates this process, but you still need to register.

Ensure Property Compliance

Your property must meet all health and safety standards, including having operational smoke and carbon monoxide detectors. Regular inspections may be needed to maintain your rental license.

The Economic Impact of Short-term Rentals in Philadelphia

Short-term rentals contribute to Philadelphia’s economy by:

• Supporting the local businesses.
• Providing passive income for homeowners.
• Boosting tourism.

However, it is essential to balance economic benefits with the concerns of the community such as housing affordability and neighborhood integrity.

A local bakery outside my business partner’s house partnered with a neighbor in the short-term rental business. They struck an informal, friendly deal where breakfast was served to the tenants through the bakery, and the owner gave them part of the earnings. My business partner spoke to them both, and this is what they had to say:

“For 2025, we are progressing as per the city’s regulations and giving back to the community as best as we can. And what’s more, is that we made so many new friends over the years”.

What Are The Exemptions To Short-term Rental Licenses in Philadelphia?

In Philly, there are specific exemptions to short-term rental licensing requirements:

Short-term Rentals of 90 Days or Fewer Per Year

If you rent out your primary residence for 90 or fewer days within a calendar year, you are exempt from obtaining a Limited Lodging Operator License. However, you must secure a CAL.

Owner-Occupied Properties

If you reside at the property, you are required to have an Owner-Occupied License.

Units That Short-term Rental Regulations in Philadelphia Outlaw

In Philly, certain units are prohibited from operating as short-term rentals due to zoning regulations and occupancy restrictions. We used to wonder about this a lot when the concept was brand new but later realized that it was to protect the integrity of the city overall. And that made a lot of sense.

Here is what we were able to gather about this:

• Properties that are classified as Visitor Accommodations are only permitted in specific zoning districts unless a variance is obtained from the Zoning Board of Adjustment.

• Even with the permissible zoning districts, overlay districts may impose additional restrictions that prohibit short-term rentals.

• For properties operating under a Limited Lodging Operator License, the total number of occupants (inclusive of the owners and renters) cannot exceed three unrelated individuals.

Guys, if you are renting out your residence on a short-term basis in Philly in 2025, you should take these rules seriously. You do not want to end up like one of our friends.

“I didn’t realize that there was a significant difference between the limited lodging and visitor accommodations. I felt that if I obtained either license, I could change my mind later. But that was not the case. Lucky for me, logic intervened at the appropriate time, or else I would have had to pay a lot of money to get out of this fix”.

What Are Some Advantages of Short-term Rental Business in Philly?

With so much to offer, Philly is not behind in the short-term rental business. Here are some advantages we believe Philly offers:

• Its historical significance makes it a popular tourist destination.
• Rentals are more affordable making it a priority for budget-conscious travelers.
• Lower entry costs make it easier to enter the short-term rental market.
• The well-defined regulatory framework provides clarity for the business operators.
• Certain areas of the city are more accommodating for short-term rentals.

Strict Airbnb Rules in Philadelphia

When venturing into the land of short-term rentals, we emphasize that you should be prepared with everything. This includes documentation, finances, records, compliance, and everything else the City of Brotherly Love seeks.

Trust me, you won’t make it that far into the short-term rental business if you try and cut corners. Rules and regulations are set in place for many legitimate reasons and we learnt it the hard way. We provided testimonies from two sources who now run successful short-term rental businesses because of these regulations.

If you are seriously considering a short-term rental business, consider moving to Philly. The city is booming with real estate, home-buying businesses, opportunities, and so much more.