A Granite Shoals listing that says "proven short-term rental" is selling a house. The city registration doesn't come with the deed. The new owner has no tax filing history, and the house's complaint record stays attached to the address. Each of these works differently at closing, and none of them shows up in a rental income summary.
Granite Shoals rewrote its short-term rental rules in December 2025. For the fiscal year that just ended, the city budgeted registration revenue at more than triple the prior year's total. Its own budget book shows that revenue staying flat. A buyer pricing in a short-term rental premium should know both facts before setting an offer.
The Sentence That Changes the Closing
On December 9, 2025, the City Council voted 7–0 to create a short-term rental article inside the city code, Chapter 10, Article VIII. The code lists it as Ordinance 885. Short-term rentals are allowed in every zoning district that permits residential use. The Granite Shoals short-term rental ordinance then states:
Registration of a short-term rental does not transfer from one property owner to another.
So a buyer who plans to keep renting files a new registration. That registration discloses the full ownership of the property, the bedroom count, a ranked contact list, a copy of the information guests receive, and proof of property insurance that names "short-term rental use." An approved registration lasts one year.
The fee is the first sign that the seller's standing doesn't carry over. The city's fee schedule charges $500 for a first-year vacation home rental registration and $300 for a renewal, under the schedule as amended through Ordinance 889 on March 24, 2026. The seller may have been paying $300 a year. A new owner starts over at $500.
Renewal adds a second requirement. To renew, an owner has to show continuous proof of reporting and paying the city hotel occupancy tax for the prior year, covering the dates the property was rented. The ordinance doesn't say how that requirement applies to an owner whose prior year includes the seller's months, so a buyer can confirm with the city how filings before and after closing will be counted.
The Complaint File Stays With the Address
The registration leaves with the seller. The property's history stays. The city may deny a registration if "valid and unresolved nuisance complaint(s) have been filed with the city about the subject property." That wording ties the complaints to the property, not to an owner. A buyer could close on a house and then be refused a registration over complaints from before the buyer owned it.
Other grounds for denial include incomplete documents and failure to comply with state and local health, fire, or LCRA rules. Once a registration is issued, the city can suspend or revoke it if the rental creates a nuisance or the structure violates those same rules.
When a guest is cited, the owner is notified and faces an escalating penalty within any 12-month period:
- First offense: a warning citation to the owner
- Second offense: a $100 fine
- Third offense: a $250 fine
- Fourth offense: a $500 fine and a six-month registration suspension that starts on the date the fine is paid
A six-month suspension could take out an entire Lake LBJ summer. The fines and the suspension fall on the owner, and the code doesn't say whether a seller's citations count against a buyer. A seller's recent citation record still shows how guests at the house have behaved under the current setup.
The House Sets the Ceiling
Rental projections often assume the house can hold as many guests as its listing photos suggest. The ordinance sets a firmer limit using three physical features of the property.
Beds. Overnight occupancy can't exceed two people per bed, counting roll-aways and pull-out couches, plus two more. Infant sleeping accommodations don't count. A house with five beds tops out at 12 overnight guests.
Bedrooms and driveway. The property needs one off-street parking space per bedroom. Street parking isn't allowed, and nothing can block access to neighboring properties. A four-bedroom house with room for three cars off the street has a problem that a renovation inside the walls can't solve. Guests also have to be told how many spaces the property has and where any off-site parking is, including parking for boat trailers. On a lake lot, that trailer question comes up quickly.
Trash capacity. The number of city-provided containers depends on maximum occupancy. One to four guests requires one container, five to eight requires two, and more than eight requires three. Bins go out no more than 24 hours before pickup and come back within 24 hours after.
On top of those limits, the registration has to name a contact who can be on site within 30 minutes of a call from law enforcement or a city official. The city may inspect annually under the International Fire Code, checking smoke detectors and fire extinguishers. The city's application packet says Bureau Veritas contacts applicants to schedule inspections. The packet is undated, so that arrangement is worth confirming with the city.
Every property also needs a sign. In September 2025, the council required short-term rentals to post a visible notice that fireworks are prohibited in the city and to include the rule in guest instructions. DailyTrib reported that Mayor Pro Tem Steve Hougen supported the change and thanked residents for raising the issue. The current code text sets the penalty at up to $1,000 per offense, and each day counts as a separate offense.
Who Sends the City Its 7%
Buyers coming from other markets often assume the booking platform handles the taxes. In Granite Shoals, the platforms cover part of it.
Granite Shoals collects a 7% city hotel occupancy tax on short-term lodging receipts. Ordinance 886, also passed 7–0 on December 9, 2025, was summarized in the council minutes as clarifying the "responsibility of STR operators for HOT tax collection/payment," codifying exemptions such as stays longer than 30 days, and establishing late penalties and misdemeanor consequences.
Airbnb's Texas tax page says guests pay the 6% Texas state hotel occupancy tax on stays of 29 nights or shorter. The page then names specific local jurisdictions where Airbnb also collects local tax. Granite Shoals isn't on that list, and the page says other obligations, including city taxes, belong to the host. The state tax itself is covered by the Texas Comptroller, which includes short-term rentals of houses.
The city's hotel tax form asks for a quarterly report even when no tax is due, with payment by check to the Finance Department and a copy of the state report attached. The form also lists a 1% discount for timely payment, a 5% penalty for payments 1 to 30 days late, 10% after that, and interest starting 61 days past due. Ordinance 886 came after the form, so its own text governs if the two differ.
Burnet County's place in this is unclear. The county's hotel occupancy tax policy describes a 5% county tax. The introductory summary says the county tax doesn't apply inside a city that imposes its own hotel tax. The operative clause, though, names only Marble Falls, Burnet, and Bertram as excluded. Whether it reaches a Granite Shoals rental is a question for the county and a tax professional, not an assumption to build into a pro forma.
What the City's Own Budget Says
When Finance Director Kevin Rule presented new short-term rental software to the council in December 2025, the stated goal was to support registration and compliance. The city's FY27 proposed budget book shows what the city budgeted for FY26, which ended September 30, and what actually came in.
| Revenue line | Actual FY25 | Budget FY26 | YTD FY26 | Projected FY26 | Proposed FY27 |
|---|---|---|---|---|---|
| Short-term rental registrations | $11,677 | $40,000 | $9,500 | $12,000 | $12,000 |
| City hotel occupancy tax | $57,348 | $80,000 | $47,638 | $50,000 | $57,000 |
For FY26, the city budgeted registration revenue at more than three times the FY25 actual. It now projects the year to finish about where FY25 did, and its FY27 proposal holds at the same $12,000. At $300 to $500 per registration, $12,000 works out to roughly 24 to 40 registered rentals, depending on the mix of new and renewing owners. The hotel tax tells a similar story. At 7%, the city's FY25 collections equal roughly $820,000 in reported taxable rental receipts citywide, and the FY26 projection equals about $714,000.
For a buyer, these figures show the scale of the registered market. Granite Shoals isn't a deep, standardized short-term rental market where every operating house trades on comparable income. It's a small registered base, and the city's FY27 proposal assumes it stays flat. A seller's income figures describe one house under one owner's registration, tax filings, and complaint history, and none of those three transfer.
The Paper Trail to Request Before an Offer
Since none of the seller's standing conveys, the useful due diligence is records that show how the house has actually operated:
- A copy of the seller's current city registration, showing the bedroom count on file
- The seller's quarterly city hotel tax reports for the past year
- Any citations or nuisance complaints the city has on record for the address
- A count of off-street parking spaces, set against the number of bedrooms
- The number of beds the advertised guest count depends on
- The insurance declarations page that names short-term rental use, as a reference for quoting the buyer's own policy
Frequently Asked Questions
Can a buyer keep the seller's future bookings? The ordinance doesn't address bookings, but the registration itself doesn't transfer. Any guest staying after closing would be staying at a property that needs a registration in the new owner's name.
Are short-term rentals limited to certain parts of Granite Shoals? No. The code allows them in every zoning district where residential uses are permitted, subject to the registration and operating rules. Private deed restrictions are a separate question for each subdivision.
Does the 30-day exemption matter? According to the council minutes, Ordinance 886 codifies state exemptions such as rentals longer than 30 days. A stay longer than 30 days falls under different tax treatment than a weekend rental. Whether a given lease qualifies depends on the ordinance and state rules.
Lake LBJ Partners has owned and operated short-term rentals on this lake, and we read a Granite Shoals rental listing with the registration, the parking count, and the hotel tax filings side by side. If you're weighing an operating rental here, or getting one ready to sell, contact us and we'll go through the records with you before anyone signs.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
