Last updated: November 5, 2026
Short answer: Often, yes. You can rent out a room or casita in your Avondale, AZ home, but the rules depend on the length of the stay. Stays under 30 days are short-term rentals and need an Avondale license and an Arizona tax license. Longer rentals follow Arizona landlord-tenant law. Check your HOA rules, insurance and mortgage first.
Key takeaways
- Under 30 days is a short-term rental: Avondale requires a $250 license, and Arizona requires a TPT (transaction privilege tax) license.
- 30 days or more: since January 1, 2025, Arizona cities can't charge a sales-type tax on residential rentals.
- A security deposit can't be more than one and a half months' rent under Arizona law.
- A casita used as living space needs to be permitted, and HOA rules can limit rentals.
Want to talk it through? Book a time to chat with me (30 minutes, 9 AM–7 PM Arizona time).
¡Qué tal! I'm Rosie Armenta. A spare room or a casita can bring in extra money, help with the cost of the house, or give a relative their own space. Before you list it, know which rules apply. Short stays and long stays are treated very differently in Arizona, and a few steps up front can save you a headache later.
Is it a short-term or a long-term rental?
The length of each stay decides many of the rules.
| Short-term rental | Long-term rental | |
|---|---|---|
| Length of stay | Under 30 days | 30 days or more |
| City license in Avondale | Short-term rental license required | No short-term rental license |
| Arizona tax (TPT) | Taxed as transient lodging; TPT license needed | No city or state TPT on residential rentals since 2025 |
| Main state rules | A.R.S. 9-500.39 and Avondale's ordinance | Arizona Residential Landlord and Tenant Act |
| Assessor registration | Ask the Assessor | Required for residential rental property |
What does Avondale require for a short-term rental?
The City of Avondale says its Ordinance No. 2060-1023 covers short-term rentals, meaning occupancy of less than 30 days. The city's page says owners must:
- Get a license. Avondale's fee schedule lists the short-term rental license at $250, and $250 to renew.
- Give emergency contact information and notify neighbors.
- Carry at least $500,000 in liability insurance.
- Do guest background checks, which an online lodging marketplace can handle if it runs them.
- Display the license number on every ad and post the license inside, visible at the main entrance.
The city says it can fine an owner up to $1,000 for each month of operating without a license, and other penalties range from $500 to $3,500. Arizona law (A.R.S. 9-500.39) says cities can't ban short-term rentals, but they can require these kinds of permits. It also lets a city require the owner to live on the property when renting a casita short term, if the casita's final approval was issued on or after September 14, 2024.
What taxes apply to renting a room or casita?
- Short-term (under 30 days): The Arizona Department of Revenue says these stays are subject to transaction privilege tax as transient lodging. You need a TPT license, and its number goes on your ads. If you book through an online lodging marketplace, ADOR says the marketplace collects and pays the TPT for those bookings.
- Long-term (30 days or more): ADOR says that starting January 1, 2025, Arizona cities can't charge TPT on residential rentals (A.R.S. 42-6004(H)), and there's no state or county tax on them. Owners of these rentals don't need a TPT license.
- Income tax: The IRS says rental income is generally reported on your tax return. If you rent part of your own home, special rules split your expenses between rental and personal use. If you use a place as a home and rent it for fewer than 15 days in the year, the IRS says you don't report that rental income.
Taxes depend on your situation, so talk with a CPA before you start.
What rules apply to a long-term roommate or casita tenant?
Arizona's Residential Landlord and Tenant Act (A.R.S. Title 33, Chapter 10) covers many residential rentals. Its list of exclusions (A.R.S. 33-1308) doesn't include renting a room in your own home, so ask an attorney how it applies to you. A few rules to know:
- Security deposit: Under A.R.S. 33-1321, a landlord can't take more than one and a half months' rent as security, including prepaid rent. The purpose of any nonrefundable fee must be in writing.
- Rental registration: A.R.S. 33-1902 requires owners of residential rental property to register with the county assessor. The Maricopa County Assessor's page describes this for property used solely as a rental, so ask the Assessor whether a room or casita in the home you live in needs it.
- Casita rentals: Under Arizona's ADU law (A.R.S. 9-461.18), cities over 75,000 people can't prohibit renting a casita or the main home as a long-term rental. Long-term there means a lease of 90 days or more, or month to month.
Here's a made-up example of how the deposit limit reads.
Example only: made-up round numbers, not real Avondale prices.
| Example only | Amount |
|---|---|
| Monthly rent for the casita | $1,000 |
| Highest security deposit allowed (1.5 months) | $1,500 |
| Rent received over 12 months | $12,000 |
| What to do with it | Report the rental income and talk with a CPA |
What should I check before I rent out a room or casita?
- The casita's permits. In Avondale, a casita used as living space needs a building permit and a Certificate of Occupancy.
- Your HOA rules. Many HOAs have rental rules in their CC&Rs. My post on the pros and cons of living in an HOA explains what HOAs can cover.
- Your insurance. Tell your insurance company before you rent. My post on homeowners insurance in Avondale explains the basics.
- Your mortgage. Read your loan papers and ask your servicer whether renting part of the home is allowed.
- Fair housing. Fair housing laws can apply to rentals and to how you advertise, so check with an attorney before you write your ad.
How do I get ready to rent out a room or casita, step by step?
- Decide short-term or long-term. Under 30 days, or 30 days and longer.
- Check the casita's permits and the HOA rules. Make sure the space can legally be lived in and rented.
- Call your insurance company and check your mortgage. Ask what coverage and permissions you need.
- Get the licenses that apply. For short-term rentals, the Avondale license and an Arizona TPT license.
- Register with the Assessor if required. Ask the Maricopa County Assessor about your setup.
- Use a written lease and talk with a CPA. Follow the deposit limit and keep records for taxes.
Thinking about renting out the whole house instead? My post on whether to sell or rent out your house in Avondale compares both paths.
Save this before you post your first rental ad.
Related questions I get a lot: what HOA fees you pay when buying in Arizona and how much property taxes are in Avondale.
Thinking about renting out part of your home, or buying one with a casita? Book a time to chat with me (30 minutes, 9 AM–7 PM Arizona time), or call or text me at 623-295-5770.
Frequently Asked Questions
Do I need a license to rent a room on a short-term site in Avondale?
Yes. Avondale requires a short-term rental license for stays of less than 30 days. The city's fee schedule lists it at $250.
Can Avondale ban short-term rentals?
No. Arizona law (A.R.S. 9-500.39) says cities can't prohibit short-term rentals, but they can require a license, insurance and other steps.
Do I pay city sales tax on a long-term rental in Arizona?
No. Since January 1, 2025, Arizona cities can't charge TPT on residential rentals of 30 days or more, and there's no state or county tax on them.
Do I need a TPT license for a short-term rental in Arizona?
Yes. Stays under 30 days are taxed as transient lodging, and you need a TPT license. An online lodging marketplace collects the tax on bookings made through it.
How much can I charge for a security deposit in Arizona?
No more than one and a half months' rent, including prepaid rent, under A.R.S. 33-1321.
Do I have to register a rental with the Maricopa County Assessor?
Arizona law requires owners of residential rental property to register. If you rent a room or casita in the home you live in, ask the Assessor whether that applies to you.
Can my HOA stop me from renting out a casita?
It can depend on your CC&Rs. Many HOAs have rental rules, so read them before you rent.
Do I have to report rental income from a room?
Generally, yes. The IRS has special rules when you rent part of your own home, and rentals of fewer than 15 days a year may not be reported. Ask a CPA.
I'm a real estate agent, not a CPA or an attorney. I can't tell you how rental income will be taxed for you or write your lease. Please talk with a CPA about taxes and a licensed Arizona attorney about your lease and landlord duties.
This article is general information, not legal, tax, or financial advice. Please talk with a licensed attorney, CPA, or lender about your situation.
About the author
Rosie Armenta | West USA Realty. Avondale (85392) is her home base, and she helps buyers and sellers across the West Valley in English and Spanish. Book a time to chat with me (30 minutes), or call or text 623-295-5770. Selling? Get a home value report.
Rosie Armenta | West USA Realty | Equal Housing Opportunity
Information was checked on November 5, 2026, from the City of Avondale short-term rentals page and FY2026 fee schedule, the Arizona Department of Revenue residential rental and short-term lodging pages, Arizona law A.R.S. 9-461.18, 9-500.39, 33-1308, 33-1321, 33-1902 and 42-6004, the Maricopa County Assessor's rental registration page and IRS Tax Topics 414 and 415. Rules and taxes change, so please confirm your situation with the city, a CPA and a licensed attorney.