We present the first volume-limited sample of spectroscopically confirmed hot subluminous stars out to 500pc, defined using the accurate parallax measurements from the Gaia space mission data release 3 (DR3). The sample comprises a total of 397 members, with 305 (~77%) identified as hot subdwarf stars, including 83 newly discovered systems. Of these, we observe that 178 (~58%) are hydrogen-rich sdBs, 65 are sdOBs (~21%), 32 are sdOs (~11%), and 30 are He-sdO/Bs (~10%). Among them, 48 (~16%) exhibit an infrared excess in their spectral energy distribution fits, suggesting a composite binary system. The hot subdwarf population is estimated to be 90% complete, assuming that most missing systems are these composite binaries located within the main sequence (MS) in the Gaia colour-magnitude diagram (CMD). The remaining sources in the sample include cataclysmic variables (CVs), blue horizontal branch stars (BHBs), hot white dwarfs (WDs), and MS stars. We derived the mid-plane density {rho}_0_ and scale height h_z_ for the non-composite hot subdwarf star population using a hyperbolic sechant profile (sech^2^). The best-fit values are {rho}_0_=5.17+/-0.33*10^-7^stars/pc^3^ and h_z_=281+/-62pc. When accounting for the composite-colour hot subdwarfs and their estimated completeness, the mid-plane density increases to {rho}_0_=6.15^+1.16^_-0.53_*10^-7^stars/pc^3^. This corrected space density is an order of magnitude lower than predicted by population synthesis studies, supporting previous observational estimates.