Short-Term Rental Laws in Olympia, WA (2026)
Olympia allows short-term rentals citywide in nearly all residential and commercial zones under Ordinance No. 7289 (2021). Owner-occupied 'homestays' need only a business license, while whole-unit 'vacation rentals' require a city Short-Term Rental Permit ($116.42, renewed every two years) and are capped at two vacation rental units per operator. Lodging is taxed at a combined 11.8% (9.8% sales tax plus 2% special hotel/motel tax), generally collected by the booking platform.
Reviewed by the STR Rule Watch research team against 8 official sources. How we verify data
Olympia STR rules at a glance
| Legal status | Allowed with permit |
|---|---|
| Permit required | Yes |
| Permit name | Short-Term Rental Permit |
| Permit fee | $116.42 |
| Renewal | Biennial |
| Owner occupancy required | No |
| Primary residence only | No |
| Max units per owner | 2 |
| Total occupancy taxes | ~11.8% of gross revenue |
| Insurance | State law (RCW 64.37.050) requires STR operators to maintain primary liability insurance of not less than $1,000,000 in the aggregate, or to conduct each transaction through a platform providing equal or greater primary liability coverage. The city's Ordinance 7289 summary also lists proof of primary liability insurance for homestays and vacation rentals. |
| Enforcement | 060(JJ): violations are subject to civil penalties and suspension and/or revocation of a City license or permit. |
| Current rules effective | 2021-09-26 |
What will guests pay in taxes on an Olympia stay?
Itemized occupancy taxes for Olympia, WA — enter your nightly rate to see the real cost breakdown.
Olympia occupancy tax calculator
| Gross rent | $450.00 |
| Washington State & local retail sales tax (Olympia, location code 3403) (9.8%)· collection varies | $44.10 |
| Special hotel/motel tax (Olympia) (2%)· collection varies | $9.00 |
| Total tax (11.8%) | $53.10 |
| Guest pays | $503.10 |
Estimate only. Platform collection varies by listing site and agreement; verify rates with the taxing authorities.
Permits & licensing
Olympia requires Short-Term Rental Permit to operate a short-term rental — the fee is $116.42, renewed every two years.
The $116.42 Short-Term Rental Permit fee (2026 Land Use & Planning Application Fee Schedule, OMC 4.40) applies to vacation rentals only; a 4.1% technology fee is added to all land use fees. Homestays (owner/tenant-occupied) need no land use permit. All STRs also need a City of Olympia general business license endorsement ($30/yr if gross income over $4,000, obtained via the WA Business Licensing Service) and a state business license.
Zoning & location rules
STRs are allowed in the zoning districts specified in OMC Tables 4.01, 5.01, and 6.01 -- effectively everywhere residential and commercial uses are permitted, including ADUs, single-family homes, duplexes, tri-plexes, four-plexes, townhouses, and multifamily buildings. STRs are prohibited in Auto Services (AS) and Industrial (I) zones, in dwelling units with income restrictions, and on properties with a Final Certificate of Tax Exemption under OMC 3.57. Max two vacation rental units per parcel containing a single-family home; in multi-unit buildings, one unit or 3% of non-income-restricted units, whichever is greater.
Taxes
| Tax | Rate | Who collects |
|---|---|---|
| Washington State & local retail sales tax (Olympia, location code 3403)6.5% state plus local portions. Registered marketplace platforms (Airbnb/Vrbo) collect and remit for platform bookings; operators taking direct bookings must remit themselves per RCW 64.37.020 (Taxes). | 9.8% | varies |
| Special hotel/motel tax (Olympia)Additional lodging tax on stays under 30 days; brings total lodging tax rate in Olympia to 11.8% (WA DOR Q2 2026 lodging flyer). A $2.00/night Tourism Promotion Area fee applies only to properties with 40 or more units, so it rarely affects typical STRs. Platforms collect where the booking is made through a registered platform; otherwise the host remits. | 2% | varies |
Enforcement & penalties
OMC 18.04.060(JJ): violations are subject to civil penalties and suspension and/or revocation of a City license or permit. Operators must give the city a 24/7 local contact residing within 15 miles of the STR or within Thurston County, post the business license and land use permit in the unit, and comply with RCW 64.37 (posted emergency contacts, floor plan/evacuation plan, guest guidelines). Occupancy is limited to 2 adults per bedroom, max 10 adults per STR.
No specific municipal dollar amounts are codified in the STR section; violations are subject to civil penalties and license/permit suspension or revocation. Under state law, a first violation of the consumer-safety provisions of RCW 64.37.030 draws a warning letter; subsequent violations are a class 2 civil infraction under chapter 7.80 RCW. The insurance section (RCW 64.37.050) carries no penalty subsection of its own.
⚠️ HOA/condo rules may prohibit STRs regardless of city law.
Getting legal in Olympia: the playbook
Generated from this market's verified rules — each step traces to the sources at the bottom of this page.
- 1
Verify your zoning
Location rules apply: 01 -- effectively everywhere residential and commercial uses are permitted, including ADUs, single-family homes, duplexes, tri-plexes, four-plexes, townhouses, and multifamily buildings. 57. Confirm your parcel's zoning with the city before applying — the full zoning rules are detailed above.
- 2
Check the covenant layer
HOA/condo rules may prohibit STRs regardless of city law.
- 3
Apply for the Short-Term Rental Permit
Budget $116.42, renewed every two years. 1% technology fee is added to all land use fees. Apply through the city — the official application page is linked in the sources below.
- 4
Line up required insurance
State law (RCW 64.37.050) requires STR operators to maintain primary liability insurance of not less than $1,000,000 in the aggregate, or to conduct each transaction through a platform providing equal or greater primary liability coverage. The city's Ordinance 7289 summary also lists proof of primary liability insurance for homestays and vacation rentals.
- 5
Set up tax collection & remittance
Platforms don't collect everything here: Washington State & local retail sales tax (Olympia, location code 3403) (9.8%), Special hotel/motel tax (Olympia) (2%) are remitted by the host. Register with the taxing authority before your first booking and calendar the filing deadlines.
- 6
Configure your listing to the operating limits
Set your calendar and listing rules to respect the 2-unit-per-owner limit — platform delisting and fines in this market typically start with listings that visibly violate these limits.
- 7
Calendar the renewal before you forget it
This permit renews every two years (budget $116.42 again). Most cities take weeks to process renewals and don't send reminders — our Host plan emails you at 60/30/7 days out.
- 8
Know the cost of getting it wrong
No specific municipal dollar amounts are codified in the STR section; violations are subject to civil penalties and license/permit suspension or revocation. 80 RCW. Full enforcement details and penalties are covered above.
Recent rule changes in Olympia
January 1, 2026
2026 fee schedule sets Short-Term Rental Permit fee at $116.42
The City of Olympia 2026 Land Use & Planning Application Fee Schedule (OMC 4.40, signed 1/1/2026) lists the Short-Term Rental Permit at $116.42, plus a 4.1% technology fee applied to all land use fees.
Official source →
Frequently asked questions
›Is Airbnb legal in Olympia?
Yes — Airbnb and other short-term rentals are legal in Olympia, WA, but you must obtain a Short-Term Rental Permit before operating. Always confirm current requirements with the city before operating.
›Do I need a permit for a short-term rental in Olympia?
Yes. Olympia requires a Short-Term Rental Permit to operate a short-term rental, which costs $116.42 and must be renewed every two years. Always confirm current requirements with the city before operating.
›How much does an Olympia short-term rental permit cost?
The Short-Term Rental Permit costs $116.42 (biennial renewal). The $116.42 Short-Term Rental Permit fee (2026 Land Use & Planning Application Fee Schedule, OMC 4.40) applies to vacation rentals only; a 4.1% technology fee is added to all land use fees. Homestays (owner/tenant-occupied) need no land use permit. All STRs also need a City of Olympia general business license endorsement ($30/yr if gross income over $4,000, obtained via the WA Business Licensing Service) and a state business license.
›Can I Airbnb a non-primary residence in Olympia?
Yes — Olympia does not limit short-term rentals to primary residences, although each owner is capped at 2 units. Zoning and other restrictions may still apply. Always confirm current requirements with the city before operating.
›What taxes do short-term rental hosts pay in Olympia?
Hosts in Olympia are subject to: Washington State & local retail sales tax (Olympia, location code 3403) (9.8%), Special hotel/motel tax (Olympia) (2%) — roughly 11.8% total on gross rental revenue. Platforms like Airbnb collect some of these automatically; check each line's collection method on this page.
›How many short-term rentals can I own in Olympia?
Olympia caps operators at 2 short-term rental units. Always confirm current requirements with the city before operating.
›Do I need insurance to run a short-term rental in Olympia?
State law (RCW 64.37.050) requires STR operators to maintain primary liability insurance of not less than $1,000,000 in the aggregate, or to conduct each transaction through a platform providing equal or greater primary liability coverage. The city's Ordinance 7289 summary also lists proof of primary liability insurance for homestays and vacation rentals. Always confirm current requirements with the city before operating.
›Does Airbnb collect taxes automatically in Olympia?
No — in Olympia hosts are responsible for registering, collecting, and remitting the listed occupancy taxes themselves. Always confirm current requirements with the city before operating.
›What happens if I operate a short-term rental illegally in Olympia?
No specific municipal dollar amounts are codified in the STR section; violations are subject to civil penalties and license/permit suspension or revocation. 80 RCW. See the enforcement section on this page for full details.
›When did Olympia's current short-term rental rules take effect?
The current ordinance took effect on September 26, 2021. See the change timeline on this page for amendments since, and the sources section for the official text.
Olympia's STR rules changed 1 time recently.
Get an email the moment Olympia changes its short-term rental rules — plus renewal reminders before your permit expires.
Watch Olympia for changes →Free monthly digest · same-day alerts from $5/mo · cancel anytime
Related
Nearby covered markets
- Seattle, WAPermit required
- Vancouver, WAPermit required
- Camas, WAPermit required
- Portland, ORPrimary residence only
- Salem, ORPermit required
More resources
- How to get a short-term rental permit in Olympia
- Olympia short-term rental taxes explained
- Can I Airbnb in Olympia?
- All Washington STR laws by city
- Occupancy tax calculator
- Compare STR permit costs across cities
- Olympia ranks among cheapest str permit cities
- Olympia ranks among easiest cities for airbnb
- STR city rankings: strictest, cheapest permits & more
- What is transient occupancy tax?
- Best STR compliance tools, compared
- Latest STR rule changes nationwide
Sources
- City of Olympia - Short-term Rentals (official STR page)retrieved July 20, 2026
- Olympia Ordinance No. 7289 (full text; passed 8/24/2021, published 8/27/2021)retrieved July 21, 2026
- Olympia Short-Term Rental Regulations Summary (Ordinance No. 7289)retrieved July 20, 2026
- Olympia Municipal Code Ch. 18.04 (18.04.060(JJ) Short-Term Rentals)retrieved July 20, 2026
- City of Olympia 2026 Land Use & Planning Application Fee Schedule (OMC 4.40)retrieved July 20, 2026
- WA Dept. of Revenue - Lodging Rates and Changes, Q2 2026 (Olympia row)retrieved July 20, 2026
- RCW Chapter 64.37 - Short-Term Rentalsretrieved July 20, 2026
- WA Dept. of Revenue - City of Olympia business license endorsementretrieved July 20, 2026
This page is informational only and is not legal, tax, or financial advice. Rules change and enforcement varies — verify current requirements with Olympia and a qualified professional before operating.