Thinking about renting your Big Sky home on Airbnb or VRBO? You are not alone. Short‑term rentals can offset ownership costs, but the rules in Big Sky are complex because properties can fall in either Gallatin County or Madison County and many HOAs set their own standards. In this guide, you will learn who sets the rules, what permits and taxes to expect, how to vet HOA documents, and the exact due diligence steps to take before you buy. Let’s dive in.
Big Sky STR basics
Big Sky does not have a single, universal short‑term rental rulebook. Your ability to rent depends on county zoning and permitting, resort or special district rules, your HOA or condo documents, and state tax requirements. A property may be allowed by county zoning but prohibited by its HOA, or vice versa. That is why you should verify each layer before you rely on projected rental income.
Two counties serve the Big Sky area. Many parcels are in Gallatin County, others are in Madison County, and some neighborhoods are influenced by resort or special service districts. Start by confirming which county your prospective property is in, then work through the rest of the checklist below.
Who sets the rules
Counties: Gallatin and Madison
County planning and zoning determine whether nightly rentals are allowed, allowed with conditions, or restricted in a given district. Contact planning staff and ask for a zoning interpretation specific to the parcel. You can start with the public portals for Gallatin County Community Development and the Madison County Planning Department.
Resort, town, and special districts
Resort areas, planned communities, and special service districts may add rules, assessments, or operational standards that affect STRs. These can include requirements for local contacts or service arrangements like snow removal and waste. If a property is within a resort boundary or special district, ask for written guidance on rental use.
HOAs and condo regimes
HOAs and condo associations commonly set minimum stays, registration rules, or outright bans on short‑term rentals. In many Big Sky buildings, association rules are the deciding factor for viability. Review the recorded CC&Rs, bylaws, rules, and any amendments, and confirm whether the board has pending changes. The Big Sky Owners Association is a helpful community resource for understanding local HOA norms.
State tax and safety oversight
Montana does not have a general statewide sales tax, but lodging and occupancy taxes apply to short stays. STR operators typically must register and remit to the state and sometimes local authorities. For tax registration and guidance, review the Montana Department of Revenue. Building, fire, and sanitation requirements are enforced by county and state agencies.
Permits and registration
Zoning and land use permission
Confirm that the parcel’s zone allows short‑term rentals or transient lodging use. Some zoning districts allow STRs by right. Others require a conditional use permit or special review, and some prohibit nightly rentals altogether.
Business or lodging registration
Counties often require a business license, lodging permit, or STR registration before you can operate. Expect an application, a fee, and periodic renewals. Many registrations ask you to list a responsible local contact for complaints and emergencies.
Lodging and occupancy taxes
Even without a general sales tax, Montana imposes lodging and occupancy taxes on short stays. You or your platform may be responsible for collecting and remitting the taxes. Confirm what the platforms remit versus what you must remit directly by reviewing guidance from the Montana Department of Revenue and your county treasurer.
Health, sanitation, and safety
Most STR programs require smoke and carbon monoxide detectors, proper egress, fire extinguishers, and clear occupancy limits. Septic or sewer capacity must be adequate for intended use. Some counties require inspections for licensing or at change of ownership, especially in multifamily buildings.
Insurance and liability
Standard homeowner policies often exclude business use. Plan for short‑term rental insurance or a commercial liability policy that aligns with county or HOA requirements. Associations may also require specific coverage levels or additional insured endorsements.
Parking, signage, and neighborhood rules
Expect limits on exterior signage and specific parking rules. Guest counts, quiet hours, and trash handling are commonly regulated by HOAs and counties. These rules can materially affect your rental plan and guest experience.
Enforcement and penalties
Operating without proper approvals can lead to fines, stop‑use orders, denial of licenses, or forced removal of listings. HOAs can levy fines, suspend amenity access, or pursue legal remedies. Compliance protects your investment and your neighbors.
HOA and condo rules
Common rental limits
Associations may ban short‑term rentals, allow them with registration, or set minimum stays such as 7 or 30 days. Some limit the share of units that can be rented at any time. Peak‑season restrictions can also appear in resort communities.
Building‑specific considerations
In condo buildings with shared amenities, STR bans or minimum stays are common. Associations may require guest registrations, deposits, or restrict transient guest access to pools and spas. Review building rules carefully and ask for written confirmation of current policies.
How associations enforce rules
HOAs can fine owners, suspend privileges, and require removal of noncompliant listings. If rental restrictions are embedded in recorded covenants, they are difficult to change. Ask about current or recent enforcement actions so you understand the building’s posture on STRs.
Smart HOA due diligence
Obtain the full CC&Rs, bylaws, rules, and amendments. Request any board resolutions or meeting minutes that mention rentals. Ask whether there are moratoria, caps, or pending rule changes. Confirm whether a local property manager or contact person is required.
Due diligence checklist
Use this checklist before you write an offer or during your contingency period:
- Confirm the parcel’s county and exact zoning designation. Ask county planning for a written zoning interpretation about nightly rentals.
- Request copies of any existing lodging or business permits from the seller.
- Verify whether a county business license, lodging permit, or STR registration is required, plus the renewal process and fees.
- Review lodging and occupancy tax obligations with the Montana Department of Revenue and your county treasurer. Confirm platform remittance rules.
- Obtain the full HOA or condo package: CC&Rs, bylaws, rules, amendments, and any rental registration forms.
- For condos, confirm rental minimums, occupancy limits, parking allocations, and any guest access policies for amenities.
- Verify utilities, septic or sewer capacity, trash service, snow removal, and winter access routes.
- Check safety items: smoke and CO detectors, egress, fire extinguishers, and any required inspections.
- Contact insurers about STR coverage and premiums. Confirm any association insurance requirements.
- Request rental performance data from the seller if available, including income, occupancy, fees, and special assessments.
- Review active listings history on platforms and verify whether listings were compliant with local rules.
- Ask county and HOA staff about recent enforcement actions in the neighborhood.
- Confirm whether permits transfer at sale or if reapplication or reinspection is required.
Red flags and tips
- Red flag: County rules appear to allow STRs, but the HOA bans them. HOA restrictions usually govern use within the development.
- Red flag: No proof of permits or registration despite recent nightly rental activity. This can signal enforcement risk.
- Red flag: High HOA dues or special assessments that erode cash flow.
- Practical tip: Get written confirmation from the HOA and county staff on any verbal statements.
- Practical tip: Assume you are responsible for accurate tax remittance unless a platform’s documentation clearly states otherwise.
- Practical tip: Consider a local property manager who understands Big Sky’s county and HOA rules and on‑the‑ground logistics like snow removal.
- Practical tip: Plan for remote management challenges. Set up reliable guest access, emergency contacts, and local service providers.
Who to contact
- Gallatin County Community Development for zoning, permits, and planning guidance.
- Madison County Planning Department for zoning, permits, and planning guidance.
- Montana Department of Revenue for lodging and occupancy tax registration and rules.
- Big Sky Owners Association for HOA and community resources.
- Big Sky Chamber of Commerce for local business context and visitor information.
- Big Sky Resort for resort‑area context and links to community resources.
If you are unsure which county a property sits in, ask title or county staff to confirm the legal description and jurisdiction. For legal document review, engage a local real estate attorney. For operations and compliance, speak with a local property manager.
Get local help before you buy
Short‑term rental viability in Big Sky is highly specific to the parcel, the building, and the governing documents. Before you underwrite any rental income, confirm the county zoning, obtain and read the HOA documents, and register with the state for lodging taxes if applicable. When you want a property‑specific plan or need help navigating Big Sky neighborhoods that work for STRs, connect with a local advisor who understands both Madison and Gallatin processes.
If you are evaluating an STR purchase or prepping a second home for compliant renting, reach out to Ryan Martello Real Estate. We will help you map the rules, line up the right contacts, and move forward with confidence.
FAQs
Are short‑term rentals legal in Big Sky?
- They can be, but legality depends on county zoning, any resort or district rules, and your HOA or condo documents, so verify each layer for the specific parcel.
Do I need a business license to run an STR?
- Many counties require a business license or lodging registration with fees and renewals, plus a local contact, so confirm the process with the appropriate county office.
How are Montana lodging taxes handled for STRs?
- Lodging and occupancy taxes apply to short stays, and owners or platforms must register, collect, and remit as directed by the Montana Department of Revenue.
What if my HOA allows STRs but zoning does not?
- You must meet both sets of rules, and a conflict can block your plan, so get written guidance from county planning and keep HOA confirmations on file.
Can existing STR permits transfer when I buy?
- Some jurisdictions require reapplication or reinspection at change of ownership, so ask the seller for permits and confirm transfer rules with county staff.
Do I need a local contact or property manager?
- Many registrations require a local responsible agent for complaints and emergencies, and a local manager can help with snow removal, access, and compliance.
