Orem Short Term Rental Regulation: A Guide For Airbnb Hosts

Do you own a place in Orem and you're weighing whether to put it on Airbnb or Vrbo? Right now, in 2026, the honest answer is no, not legally, and that holds whether you're picturing the whole house or just a spare bedroom. Orem, the second-largest city in Utah County, has banned short-term rentals of less than 30 days since 2002, and that ban was still the law of the land as of this guide's last check in July 2026.

What makes Orem worth its own guide, though, is that the ban isn't sitting still. A 2025 state law finally gave Utah cities clear authority to write real short-term rental ordinances instead of just enforcing old zoning language around the edges, and Orem spent nearly all of 2026 trying to use it. The City Council narrowed its options to two by the end of May, then postponed the final vote in July with no new date on the calendar, so hosts, buyers and neighbors are all waiting on the same decision you are.

This guide covers where that stands as of July 2026: what the current ban does and doesn't cover, what's being drafted to replace it, the taxes that would apply either way, how the city has enforced the rule so far, and who to call for the latest word. Every figure below comes from Orem's own code, Utah's Tax Commission, or direct reads of the 2026 Council coverage, and where the outcome is still moving, this guide says so rather than guessing. Do check the dates on anything you read elsewhere, since this process has already slipped once. If Orem's uncertainty has you eyeing other Utah markets instead, run the numbers through BNBCalc first before you commit to anything.

What are short term rental (Airbnb, VRBO) regulations in Orem,Utah?

Running those numbers only matters once you understand exactly what Orem prohibits, so start with the mechanism rather than the headline. Orem's zoning code sorts every land use into permitted, conditionally permitted, or not permitted by zone, under Orem City Code § 22-19-1, Land Uses by Zone. The code's own definitions do the real work here.

Under § 22-2-1, a "Dwelling" is a building occupied as a residence by a family, "but not including hotels, motels or bed and breakfast establishments." Rent a spare room to a paying guest for a few nights and you've functionally created a hotel or motel use inside a residential zone. The code simply doesn't allow that. That's the mechanism reporters and the city both point to when they describe Orem as having banned "transient lodging" since 2002, a characterization the Daily Herald and KUTV both report plainly.

There's a carve-out worth knowing, and it explains a lot of the confusion hosts run into. Orem's definition of "family" allows unrelated guests to stay in your home for less than 30 days within a rolling one-year period, as long as they don't pay rent or give anything else of value for the privilege. Have friends stay for free and you're fine. Charge them, even informally, and the same stay becomes the prohibited use. Length and money are what flip the switch, not headcount.

Utah's own preemption law doesn't rescue you here, and it's worth understanding why. Utah Code § 10-8-85.4 bars a city from punishing someone solely for listing a property on a short-term rental website, but it never required cities to legalize the underlying use. Orem can still zone the activity out of residential neighborhoods entirely, and it has.

That changed shape somewhat with H.B. 256 (2025), which gave cities the clearer authority to license and regulate short-term rentals while barring a citywide ban across every zoning area at once. Zone-by-zone restriction still stands. That's exactly the tool Orem is now trying to use. Our Utah statewide guide walks through that preemption framework in more depth if you're comparing Orem against a city elsewhere in the state.

None of that stopped the market from existing anyway. Going through the city's own numbers as reported by KUTV in January 2026, roughly 250 short-term rentals were listed across Orem, "ranging from spare bedrooms to entire homes," despite the ban being on the books the entire time. Enforcement had been genuinely light: about 15 complaints over the prior two years, mostly about parking and noise, according to the same report.

Mayor Karen McCandless put it bluntly in January 2026, telling reporters that "Orem doesn't have any licensing or database or anything like that with short-term rentals." By July, she was still saying the same thing in the present tense in her own newsletter to residents: "The City Council right now is working on the short term rental ordinance." That gap between what the code says and what happens on the ground is the whole story of 2026. It's why the rest of this guide reads less like a settled rulebook and more like a situation still developing.

Starting a Short Term Rental Business in Orem

Unfortunately for most people reading this, there is no legal business here yet. If your plan was to buy a place in Orem, furnish it, and list it on Airbnb for nightly stays, that plan runs straight into the zoning ban described above, and no LLC structure or clever lease language changes that. What existed instead, as of mid-2026, was a shadow market: around 250 active listings operating on the strength of loose enforcement rather than any actual permission.

That shadow market is exactly what pushed the city to act. The catalyst, according to both the Daily Herald and KSL, was the so-called "GOAT House" at 617 W. 1475 North, a property that could sleep more than 25 guests and came complete with a pool, sports court and live goats in the yard. A 100-plus-person sorority event there in 2023 brought neighbors to the Council with complaints about noise, traffic and odor.

That single case is the one Deputy City Attorney Jacob Summers still referenced in Council discussions three years later. HB 256 gave the city the legal tool to respond. The GOAT House gave it the political reason to.

What the Council has been drafting, though it hadn't passed anything as of this guide's last check, splits into two competing paths. The May 26, 2026 work session narrowed the field to these two, per the Daily Herald:

• Owner-occupied only. You'd need to live in the home yourself and rent out a portion of it, similar to how many Utah cities already treat home-sharing.
• Non-owner-occupied allowed, under strict regulation. Density limits, a numerical cap on the total number of permits, and possibly a "legacy" carve-out protecting operators who were already active before January 1, 2025.

A full prohibition was on the table earlier in the process and was explicitly ruled out at that same session, so don't plan around Orem banning short-term rentals outright going forward. The city also estimated that enforcing whichever option it picks would cost between $141,000 and $210,000 for dedicated staffing, a number Mayor McCandless said would make the process "very regulatory-intense" if the legacy protections survive into the final draft.

If you already own property here and the math only worked at nightly rates, the more realistic near-term move is comparing Orem against a market where the rules are settled. The Salt Lake City guide and the Sandy guide both cover Wasatch Front markets with an actual functioning permit process today.

Short Term Rental Licensing Requirement in Orem

Since there's no legal path to operate yet, there's also no dedicated license to apply for, and that's worth stating plainly rather than describing a program that doesn't exist. Mayor McCandless said as much herself: no licensing system, no database, nothing to register with as of this guide's last check. What some hosts did get, informally, was a city text message pointing them toward the ordinary rental dwelling license every landlord in Orem needs. One host told the Daily Herald the city's message said only to list the unit's occupancy as a short-term rental and pay the annual fee, quoted at $50 in that February 2026 reporting. Orem's own landlord licensing page now lists that same fee at $55 a year, so treat the exact number as something worth double-checking rather than something fixed. Make sure you understand that this rental dwelling license is not a short-term rental permit. It's the general license any Orem landlord needs, and holding one confers no zoning protection at all.

What you can do today, whether or not your home would ever qualify, is register for the state-level tax obligations that attach to lodging regardless of local zoning. Utah treats a host as a seller for tax purposes, and registration runs through the Tax Commission's Taxpayer Access Point on form TC-69, covering both sales tax and transient room tax. There's no listed state fee and no fixed renewal date. The Commission simply assigns you a monthly, quarterly or annual filing frequency once you're registered.

Once Orem does pass an ordinance, expect the license itself to look a lot like the two draft frameworks the Council has been discussing: an owner-occupancy requirement or a capped non-owner track, an occupancy limit around eight people, parking provisions, and geographic restrictions on where non-owner licenses could sit. None of that is finalized, so treat those specifics as directional rather than something you can rely on yet. Keep an eye on the Planning Division's contact line below for the moment an actual application process opens, since being early in that queue could matter if the city ends up capping the total number of non-owner permits.

Required Documents for Orem Short Term Rentals

Because no license category exists, there's no required-documents checklist tied to short-term rentals specifically either, which makes this section shorter than most guides on this site and honestly so. What you do need, regardless of Orem's zoning status, is the paperwork Utah requires of anyone collecting rent for temporary lodging anywhere in the state. That means completing TC-69 registration with the Tax Commission, keeping records of every reservation and the rent collected on it, and being ready to file sales tax on form TC-62M or TC-62S and transient room tax on form TC-62T once you're assigned a filing frequency.

If and when Orem finalizes an ordinance, expect the application to ask for proof of owner-occupancy (for that track), a parking plan, and a floor plan supporting whatever occupancy cap the final rule sets. Don't assemble that paperwork yet on the assumption the draft won't change again; the process has already slipped past one expected vote, and the details of what counts as acceptable proof haven't been published anywhere official as of this guide's last check.

Orem Short Term Rental Taxes

Assuming the ordinance eventually clears and hosting becomes legal here, there's still a real tax bill to plan for, and it's worth understanding now rather than after your first booking. A taxable Utah stay of less than 30 consecutive days can carry up to six layers of tax under the Tax Commission's own lodging-provider guidance, Publication 56. At the Orem address specifically, that stack breaks down as follows:

Tax	Rate	Collected by
State sales and use tax	4.85%	Utah State Tax Commission
County option, transit and arts sales tax add-ons	2.60% combined	Utah State Tax Commission
Statewide transient room tax (TRT)	1.07%	Utah State Tax Commission
Utah County transient room tax	4.50%	Utah State Tax Commission
Orem municipal transient room tax	1.00%	Utah State Tax Commission (under contract with Orem)

The first two rows combine into a 7.45% combined sales and use tax rate, confirmed directly against the Tax Commission's own April 2026 combined-rate chart for Orem's county and city code, 25-083.

The bottom three rows combine into a 6.57% combined transient room tax: the state's 1.07%, plus Utah County's 4.5% (raised from 4.25% effective October 1, 2025, per the Utah County Commission's vote), plus Orem's own 1% municipal rate, confirmed directly from Orem City Code Article 18-3. Add the two totals together and a taxable Orem stay would carry roughly 14.02% in combined tax, split across sales tax and transient room tax lines on the same invoice.

Don't assume the zoning ban gets you out of any of this, either. Utah's tax obligations attach to the transaction, not to whether the underlying use is zoned correctly, so a host running one of the roughly 250 existing listings still owes these taxes even while operating outside the zoning code. Airbnb's own help page confirms it collects and remits the combined sales tax and the state and local transient room taxes on Utah reservations under 30 nights, which covers most of this stack automatically if that's your platform. Vrbo's materials only speak in general "where required by law" language rather than naming Utah specifically, so verify your own listing's tax settings directly with Vrbo rather than assuming parity with Airbnb.

Orem wide Short Term Rental Rules

Since the tax obligations apply no matter what the zoning code says, it helps to be equally clear about what the zoning code itself restricts today. Keep in mind that this part is settled law, not a draft, so it applies regardless of which ordinance option the Council eventually adopts. The operating rule in force right now is simple to state and hard for some owners to accept: no paid stay under 30 days is a permitted residential use anywhere in Orem, full stop, because the "Dwelling" definition excludes hotel, motel and B&B-type occupancy from every residential zone.

There's no owner-occupied exception carved into the current code, no small-cap allowance, and no grandfather clause protecting anyone who started before the ban. The roughly 250 listings still active are operating on enforcement gaps, not on any right the code grants them.

What the draft ordinance would add, once it passes, is a genuine set of operating rules rather than a blanket prohibition. Based on the Council's May 2026 work session, expect these to be the shape of it:

• An occupancy cap around eight people per stay.
• A required parking plan, since overflow parking was one of the two most common complaint categories under the old light-touch enforcement.
• Either an owner-occupancy requirement, or density and geographic limits on non-owner-occupied units if that track survives the final vote.
• Possible legacy protection for hosts who were already operating before January 1, 2025, though the Council has not committed to that cutoff staying in the final draft.

Until one of those options actually becomes law, treat this section as "what's likely," not "what's binding." The one binding rule remains the one in the section above: no compensated stay under 30 days, anywhere in the city, under any current exception.

Does Orem strictly enforce STR rules?” Is Orem Airbnb friendly?

Given how firm that current rule is on paper, you'd expect aggressive enforcement to match it, and that's exactly where Orem has surprised a lot of owners. In practice, enforcement has been complaint-driven and fairly light. Around 15 complaints over two years, against roughly 250 active listings, works out to a strikingly low rate of city intervention. Mayor McCandless has been candid that the city simply lacked the tools, a license database, a registration list, any way to proactively find noncompliant listings, to do more than respond when a neighbor called.

That doesn't mean the risk is zero, and homeowner Derek Brown found that out the hard way. Per KUTV's July 2026 reporting, Brown said he "just spent a couple hundred thousand dollars more" renovating a property based on informal approval from city staff, only to watch the Council reconsider an outright ban months later.

When Orem does act, the penalty is real. Operating in violation of the zoning code is a Class C misdemeanor under § 22-1-6, punishable by a fine of up to $500 for an individual (or $1,000 for a corporation, association or partnership), up to three months in jail, or both, and each day a violation continues counts as a separate offense. Code enforcement staff are also authorized under § 22-1-3(C) to issue non-criminal citations, which is the faster, more common path in practice.

So is Orem Airbnb friendly? Not on paper, and not yet in any formal sense. The honest read, going through everything the city has said and done in 2026, is that Orem is a city actively deciding how friendly it wants to be, with the answer likely to change within the next year. That's a meaningfully different situation from a city that has settled on "no" permanently, but it's still a "no" today, and it's worth planning around the code as written rather than the code as it might read in 2027.

How to Start a Short Term Rental Business in Orem

Given that uncertainty, the order you approach this in matters more than the individual steps, so work through it in sequence rather than jumping to the parts that sound fun.

1. Confirm the current status before you spend anything. Call or text Orem Planning at 801-229-7058, since the Council's timeline has already slipped once and could move again before you read this.
2. Decide whether you're an owner-occupant or an investor, because the two draft tracks treat those cases very differently, and one of them (non-owner-occupied) is far less certain to survive the final vote.
3. If you already have a listing live in Orem, know your exposure. Roughly 250 others are in the same position, enforcement has been light, but a citation carries a real fine and the possibility of jail time under § 22-1-6.
4. Register with the Utah Tax Commission regardless. Your rental income and the applicable sales and transient room taxes are owed whether or not the zoning use is legal, so don't let the zoning question delay the tax registration.
5. Track the ordinance directly rather than relying on old news. Watch Orem's 2026 City Council meeting schedule for the rescheduled vote, since no new date was set as of July 2026.
6. Model the numbers for a settled market while you wait. Run comparable Utah properties through BNBCalc and weigh Orem's uncertainty against a market where the rules already exist.
7. If the legacy cutoff survives, document your operating history now. Keep booking records, dates and revenue for any stay before January 1, 2025, in case that protection makes it into the final ordinance.

Who to contact in Orem about Short Term Rental Regulations and Zoning?

Whichever step above you're stuck on, three offices between them handle almost everything.

Orem Planning & Community Development owns the zoning question and the short-term rental ordinance itself.

• Address: 56 N. State Street, Orem, UT 84057
• Phone: 801-229-7058 (call or text)
• Online: orem.gov/planning

Orem Code Enforcement, the Neighborhood Improvement Team, handles complaints about an existing rental and any citation that follows.

• Address: 56 N. State Street, Orem, UT 84057
• Phone: 801-229-7000 (call or text), or dial 311
• Online: orem.gov/neighborhoodimprovement

The Utah State Tax Commission handles the TC-69 registration and every sales and transient room tax return, no matter what Orem's zoning code says.

• Address: 210 North 1950 West, Salt Lake City, UT 84134
• Phone: 801-297-2200, or 1-800-662-4335 toll free
• TDD: 801-297-2020
• Online: tax.utah.gov/utah-taxes/registration

Official pages for these offices didn't list posted hours as of this guide's last check, so it's worth calling ahead before you make a special trip, particularly to the Planning Division if you're bringing paperwork in person.

What do Airbnb hosts in Orem on Reddit and Bigger Pockets think about local regulations?

Since so much of this guide comes down to who the city listens to, it's worth hearing directly from the people caught in the middle. Going through what's publicly available, I couldn't find a dedicated Reddit or BiggerPockets thread specific to Orem's 2026 process worth quoting, so what follows leans on the on-the-record hosts and residents local reporters actually talked to, not a forum survey I never read.

• Existing hosts describe real money already on the table. Derek Brown's account, that he sank a couple hundred thousand extra dollars into a property based on informal city approval, is the clearest signal that Orem's loose enforcement history created genuine reliance. Whatever the Council decides, hosts in his position are going to push hard for the legacy protection tied to the January 1, 2025 cutoff.
• Hosts have organized rather than just posting individually. A group calling itself the Orem Short Term Rental Alliance has been showing up to public comment, and its stated position is that it's open to real rules on noise and trash, provided the city doesn't write an occupancy cap so tight it makes larger family-sized homes unrentable.
• Neighbors aren't unanimous either. KUTV's June 2026 reporting found opinions genuinely split: some residents value the flexibility short-term rentals offer, while others worry about "changing neighbors" and neighborhood stability. One resident who supported a ban declined an on-camera interview specifically over concern about backlash from neighbors who disagreed.
• The GOAT House still shapes the conversation. Even years later, city officials referenced that single 2023 property when explaining why regulation felt necessary at all, which tells you the debate in Orem is driven less by short-term rentals broadly and more by a handful of high-impact properties.
• Nobody serious argues the old status quo can continue. Between the state's 2025 law change and years of light-touch enforcement colliding with a genuine housing-supply conversation, every account of the 2026 process treats "go back to quietly ignoring it" as off the table, even among people who disagree on everything else.

If you're weighing Orem against a market that's already settled its rules, the Park City market is worth pulling up for comparison, since it sits in the same part of the state and gives you real occupancy and rate data to model against while Orem finishes deciding what it wants to be.

Frequently Asked Questions

Can you legally run an Airbnb in Orem in 2026?

No, not in the normal sense. Orem's zoning code treats any paid stay under 30 days as a hotel or motel use, which isn't permitted in residential zones, and that rule has been in place since 2002. Around 250 listings were operating anyway as of early 2026, tolerated by light, complaint-driven enforcement rather than any legal permission. The City Council was drafting a licensing ordinance to replace the ban throughout 2026, but the final vote was postponed in July with no new date set, so the ban was still the operative rule at last check.

What does Orem's short-term rental ban actually prohibit?

It prohibits renting any residential unit, or a room inside one, to a paying guest for fewer than 30 consecutive days. Orem's code treats that as a hotel or motel use, and its definition of a residential "dwelling" excludes hotels, motels and bed and breakfasts entirely. It does not prohibit hosting unpaid guests, such as friends or family, for less than 30 days within a rolling one-year period. The dividing line is compensation and length of stay, not simply how many people are in the house.

Is Orem about to legalize short-term rentals?

Possibly, but not yet, and not on a confirmed timeline. The Orem City Council spent 2026 narrowing its options to two paths, owner-occupied only or a capped non-owner-occupied program, and ruled out keeping a full ban. A vote expected by summer 2026 was postponed in July with no new date announced. Treat any specific detail about occupancy caps, parking rules or a legacy cutoff as a draft proposal rather than settled law until the Council actually adopts an ordinance.

What happens if you operate a short-term rental in Orem right now?

You're operating in violation of the zoning code. That's a Class C misdemeanor under Orem City Code § 22-1-6, carrying a fine of up to $500 for an individual or $1,000 for a corporation, up to three months in jail, or both. Each day the violation continues counts as a separate offense. In practice, enforcement has mostly meant a non-criminal citation triggered by a neighbor complaint about parking or noise, but that history doesn't guarantee future leniency, especially once the city finishes building the licensing and enforcement system it's currently funding.

Do you still owe Utah taxes on rental income if the rental itself is illegal under city code?

Yes. Utah's sales tax and transient room tax obligations attach to the transaction itself, not to whether the local zoning use is legal. An unpermitted Orem listing still owes roughly 14% combined in state, county and municipal tax, and still needs to register with the Utah Tax Commission. Airbnb collects and remits most of that automatically on Utah reservations under 30 nights. That tax exposure alongside a zoning violation makes operating before Orem finalizes its ordinance more than a paperwork risk.

Last verified: July 2026. Every ordinance, tax rate, state law, and contact detail in this guide links to or comes from its official source.