Short-Term Rental Rules on Cedar Creek Lake

No Special STR District -- But Rules Still Apply

Cedar Creek Lake does not have a WORD-equivalent special district collecting a percentage lodging fee on STR revenues, unlike Canyon Lake on the Guadalupe. This removes one regulatory layer that STR operators at other Texas lakes must navigate. However, the absence of a special district does not mean Cedar Creek Lake STRs are unregulated. Multiple layers of authority still apply depending on your property's specific location.

Gun Barrel City

Gun Barrel City, the most populated incorporated community on the lake, has its own municipal code that governs STR activity. The city has adopted ordinances addressing noise, occupancy limits, and commercial activity in residential zones. Buyers targeting Gun Barrel City specifically for STR investment should contact the city directly for current ordinance status -- STR regulations in Texas municipalities have been evolving rapidly since 2020 and the current rules may differ from what you find in older online sources.

Unincorporated Henderson and Kaufman County

Properties in unincorporated areas outside Gun Barrel City and Mabank are generally subject to county-level rules rather than city ordinances. Neither Henderson nor Kaufman county has adopted the same level of proactive STR regulation as some DFW municipalities, making unincorporated county properties generally more permissive for STR use -- subject to deed restrictions and HOA rules that may apply to specific subdivisions.

Septic Adequacy: The STR-Specific Concern

The most significant STR-specific regulatory issue at Cedar Creek Lake is septic system adequacy. Henderson County and Kaufman County both treat conversion of a residential property to commercial STR use as a potential change of use under OSSF regulations. If your advertised guest capacity exceeds the design capacity of your septic system, the county may require you to upgrade to a commercial-rated OSSF before legally operating at that capacity. Commercial aerobic systems can cost $8,000 to $20,000 installed. Get a septic assessment from the relevant county engineer's office during your option period for any Cedar Creek Lake property you plan to operate as a high-occupancy STR.

State Hotel Occupancy Tax

All Texas STR operators must register with the Texas Comptroller and collect and remit state hotel occupancy tax (HOT) on rental income. The state HOT rate is 6%. Many STR platforms like Airbnb and VRBO collect and remit state HOT on behalf of Texas hosts automatically -- confirm your specific platform's remittance policy. Even if the platform remits state HOT, you are still responsible for any local HOT obligations. Gun Barrel City and Mabank may have local HOT requirements in addition to state HOT -- verify current local HOT obligations with each city directly before listing.