California Airbnb and Short Term Rental Regulations

California is a popular location for Airbnb investments due to its many tourist attractions and warm climate. However, it's important to familiarize yourself with the state's short term rental laws before buying a vacation rental property. California has strict regulations for vacation rentals, and leaves it up to local authorities to determine their own laws and restrictions. Each city in the state has its own laws and regulations, so it's important to research the specific regulations in the city where you plan to invest.

If you're interested in turning your property into a short-term rental, but you're not sure if it's legal under Airbnb regulations, Awning can help. As a nationwide property management company, we are well-versed in the laws and regulations surrounding short-term rentals. Contact an Awning agent today and let us help you determine if your property qualifies. Call or text 415-941-5206

California's Definition of a Short Term Rental

The State of California defines a short term rental as a residential dwelling or a portion of a residential dwelling that is rented out for 30 consecutive days or less. This definition comes from Senate Bill No. 60 (SB-60) enacted in 2021. A residential dwelling, in turn, refers to a private structure that has been designed and is available for use and occupancy as a residence by one or more individuals. This definition excludes commercially operated hotels, motels, bed and breakfast inns, and timeshare properties.

As of 2024, California has added new disclosure requirements for short term rental operators. Hosts must now disclose all additional fees or charges that guests must pay if they don't perform obligatory cleaning chores at the end of their stay. This transparency measure helps protect consumers while maintaining the flexibility of the short term rental market.

Starting a Short Term Rental Business in California

Starting any business, including a vacation rental, in California is handled by the Office of the California Secretary of State (SOS). According to their website, you need to go through a few steps in order to form a business.

The 5 steps to start a short-term rental business in California are:

• Develop a Business Plan: The SOS website recommends building a business plan as a first step in the process of starting a California business. As an aspiring California Airbnb host, you should think about the location, structure, marketing, advertising, and promotion of your short term rental before buying a property.
• Choose a Location for Your Business: As a second step, it's important to select the best location for your business. This is especially true for an Airbnb property as investing in different California markets comes with varying property prices, daily rates, occupancy rates, Airbnb income, and return on investment as well as various laws and regulations.
• Select a Business Structure: As a California short term rental business owner, you can choose from a few different legal structures: corporation, limited liability company (LLC), limited partnership, general partnership, limited liability partnership, and sole proprietorship. Each of these provides its own pros and cons, so you need to study them carefully and decide on the best business structure for your specific situation.
• File Tax and Employer Identification Documents: California Airbnb hosts are expected to pay taxes, which requires the filing of tax and employer identification. You need to apply for an employer ID number (EIN) through the IRS website, as a federal requirement. You will also need to pay transient occupancy tax to the California Department of Tax and Fee Administration. In many California counties and cities Airbnb and other short term rental listing platforms collect and remit this tax on behalf of hosts.
• Obtain Licenses and Permits: The final step is applying for relevant licenses and permits. While there are no such requirements for short term rentals at the state level, in most California cities starting an Airbnb business requires a license or a permit. Keep reading to find out the city-level regulations in this regard.

California Short Term Rental Taxes

Owners of California short term rental properties are expected to pay transient occupancy tax (TOT). There is no universal TOT rate as it varies between counties and cities. In most cases the transient occupancy tax rate ranges from 8% to 14%. This tax is levied on the listing price including cleaning fees and any other relevant fees.

Many cities have also implemented Tourism Business Improvement District (TBID) assessments, which typically add another 1% to 3% on top of the TOT. These funds go toward promoting tourism in the local area.

Federal Tax Deductions

If you rent out your California vacation rental for a minimum of 14 calendar days a year and you use the property for personal reasons for a maximum of 14 calendar days a year, you qualify for federal tax benefits pertinent to short term rental businesses. As a savvy investor, you need to know and take advantage of all tax deductions as this helps you maximize your cash flow and Airbnb profit margins.

Here are the expenses you can write off when filing taxes:

• Mortgage interest
• Mortgage insurance premiums
• Property tax and other taxes
• Depreciation
• Maintenance work
• Utilities
• Supplies
• Cleaning services
• Accounting services
• Home office expenses

Statewide Short Term Rental Rules in California

The statewide California short term rental laws are not very detailed. Instead, they allow local authorities to impose regulations in the areas under their jurisdiction in order to address the needs and interests of the local communities in the most appropriate manner.

It's important to note that AB 1482, California's Tenant Protection Act, generally doesn't apply to short term rentals under 30 days. This means that rent control and just cause eviction requirements don't affect true short term rental operations. However, if you're renting for periods longer than 30 days, these protections may apply.

Major Updates in California Short Term Rental Regulations

Before diving into individual city regulations, here are the most significant changes that have occurred since our last update:

• Santa Ana: The city completely banned short term rentals in April 2024. This represents a major shift from being one of the most favorable markets to having a complete prohibition.
• South Lake Tahoe: Measure T was struck down by the courts in March 2025, and the city declined to appeal in April 2025. A new ordinance took effect July 17, 2025, allowing short term rentals again with a 150-foot buffer zone requirement between properties.
• San Diego: Updated fee structures took effect March 1, 2025, and the city now has zone-based TOT rates ranging from 11.75% to 13.75% depending on proximity to the Convention Center.
• Palm Springs: New permits are limited to 26 rental contracts per year (down from 36), and the city introduced a new Junior permit option allowing up to 6 rentals per year.
• Oakland: The city is developing new regulations expected to be finalized by spring 2025. Currently, rentals under 30 days remain prohibited in most residential zones.

Short Term Rental Rules By California City

While the vacation rental industry has spread across the entire US in the past decade, its growth in California has been explosive. After all, this is the birthplace of Airbnb which largely drove the industry-wide expansion. Consequently, each California county and city has enacted its own vacation rental regulations in an effort to protect the safety, quality of life, and housing options of local residents.

Here are the Airbnb laws in 11 top California cities:

1. San Diego, California Short Term Rental Laws

In San Diego, short term rentals are defined as dwelling units if they are rented out for less than one month at a time and are located within the City of San Diego. According to the San Diego Short-Term Residential Occupancy (STRO) Ordinance, this requires a license, and a host can hold only one license at a time. Moreover, licenses are not transferable between owners, locations, and units.

San Diego short term rental properties are divided into four license types with different requirements and regulations:

Tier 1 - Part-Time: In case a dwelling unit is rented out for an aggregate of no more than 20 days per year, the owner or permanent resident does not need to be on site during the stay.

Tier 2 - Home Sharing: This refers to the renting of a room or rooms for more than 20 days a year, provided that the owner or permanent resident resides on site. They can be absent during the STRO for a maximum of 90 days per calendar year. Home sharing can include duplexes and eligible accessory dwelling units if the host resides on site.

Tier 3 - Whole Home Excluding Mission Beach: When a property is rented out for more than 20 calendar days a year and the owner or permanent resident does not reside on site, the total number of licenses will not exceed 1% of San Diego's total housing units outside the Mission Beach Community Planning Area. Guests are required to stay for a minimum of two nights per stay.

Tier 4 - Mission Beach Whole Home: For properties rented out for 20 days or more in a year where the owner or permanent resident does not reside on site, the total number of licenses will not exceed 30% of the Mission Beach Community Planning Area. The minimum stay per guest is two nights.

San Diego non-owner occupied short term rentals are limited, so investors need to check out whether they can qualify before buying an Airbnb property in the city.

As of August 2025, the application period for Tiers 1, 2, and 3 is currently open. The Tier 4 waitlist application period will reopen on July 1, 2025 and close on August 15, 2025. A random lottery will be conducted to determine waitlist positions, with results published by August 22, 2025.

Updated San Diego Fees (Effective March 1, 2025)

Application Fees:

• Tier 1 and Tier 2: $33 (non-refundable)
• Tier 3 and Tier 4: $41 (non-refundable)

License Fees:

• Tier 1: $193
• Tier 2: $284
• Tier 3 and Tier 4: $1,129

Short term rental licenses are valid for two years in San Diego, after which they need to be renewed.

In terms of taxes, San Diego Airbnb hosts are responsible for paying:

• Transient occupancy tax (TOT): Rates now vary by zone based on proximity to the Convention Center:
  
  • Zone 1: 11.75%
  • Zone 2: 12.75%
  • Zone 3: 13.75%
• Rental unit business tax (RUBT): $34 for a business with no more than 12 employees and $125 plus $5 per employee for a business with more than 12 employees.

The city's Building and Land Use Enforcement (BLUE) team actively monitors platforms like Airbnb and VRBO for unlicensed properties. Operating without a valid STRO license can result in fines starting at $1,000 per violation.

2. Big Bear, California Vacation Rental Laws

Unlike most California locations, the City of Big Bear Lake refers to Airbnb-style properties as vacation rentals. The City regulates vacation rentals within the zip code 92315, while properties outside this zip code should contact San Bernardino County.

Big Bear Lake short term rental owners need to apply for a vacation rental registration. The city allows a maximum occupancy of one person per 200 square feet of living area, with a maximum of 16 guests per property.

Submitting a Vacation Rental Program Registration Application requires:

• Property owner information including name, phone number, mailing address, and email address.
• Rental property information including address and assessor's parcel number.
• Management company information if not owner managed.
• In-person check-in agent information who must reside within 15 miles of the rental unit.
• Property information including living area in square feet and number of bedrooms.
• 24/7 compliant response agent information who must reside within 15 miles of the rental unit.
• Home Share License if the owner lives on site during all rentals.
• Payment of a non-refundable fee of $550 for a Vacation Rental Permit.
• Passing a home inspection which takes 2-4 weeks.
• Owner and agent certification with an annual exam requiring a 100% score.
• Good Neighborhood Policy signed by all agents.

Big Bear vacation rental licenses are valid for one year, after which they need to be renewed. Permits are not transferable through ownership. Furthermore, you can hold a maximum of two vacation rental permits regardless of whether you own a property individually or in a trust or a corporation.

Big Bear Lake Airbnb hosts need to collect and remit:

• TOT at a rate of 9% of gross receipts
• Big Bear Lake Tourism Business Improvement District (BBLTBID) assessment of 3%

Properties in the County areas (92314 zip code) have different regulations and require a $599 permit valid for two years.

3. Palm Springs, California Vacation Rental Laws

Palm Springs is one of the hottest Airbnb locations not only in California but nationwide. In the City of Palm Springs Airbnb properties are referred to as vacation rentals and are defined as stays of less than 28 days. To run a Palm Springs short term rental business, you need to obtain a Vacation Rental or Homeshare Registration Certificate.

Major 2025 Palm Springs Changes

The city has implemented significant changes to its vacation rental regulations:

• Rental Contract Limit: New permits are limited to 26 rental contracts per year (down from 36). Existing permit holders keep the 36-contract limit until January 1, 2026.
• Neighborhood Cap: The city now limits vacation rental permits to 20% of total dwelling units in each of the 51 recognized neighborhoods.
• Junior Permits: A new permit type allows up to 6 rentals per year at 50% of the regular fee ($642). These permits don't count toward the neighborhood cap.

Updated Palm Springs Fees (2025)

Registration Fees:

• Standard Vacation Rental: $1,258 annually
• Junior Vacation Rental: $642 annually
• Estate homes (5+ bedrooms) LUP fee: $453

Submitting a Vacation rental application to the City of Palm Springs requires:

• Owner operator application or agency operator application
• Copy of owner's driver's license
• Ownership form
• Signed electrician's pool statement and invoice
• Safety inspection form
• Proof of insurance with a minimum liability of $500k per occurrence
• TOT permit application if applicable
• Letter from HOA if property is located within an HOA

Palm Springs vacation rentals are subject to:

• Transient occupancy tax (TOT) at a rate of 11.5%
• Tourism business improvement district (TBID) at a rate of 1%

The city enforces a three strikes rule where three violations in any 12-month period can result in a two-year suspension. Operating without a permit carries a $5,000 fine and permanent ineligibility.

4. Los Angeles, California Short Term Rental Laws

As one of the most visited cities in California and one of the most demanded Airbnb locations in the US, Los Angeles has some of the most stringent short term rental regulations not only in The Golden State but also nationwide.

The Los Angeles Municipal Code defines a short term rental as a rental unit rented in whole or in part to a person or persons for transient use of no more than 30 consecutive days. This form of homesharing is limited to the host's primary residence only. A primary residence is defined as the residence in which a host resides for more than six months per calendar year (at least 275 days). This doesn't necessarily need to be the property owner; it could also be a tenant with landlord permission.

Short term home sharing is limited to no more than 120 days per year unless the host has obtained an extended home sharing approval. Additionally, a host is limited to running a single short term rental only. Los Angeles has prohibited short term rentals in the City's most restrictive residential zones and in rent-stabilized properties.

Registration Fees:

• Regular Home-Sharing: $89-$192 annually
• Extended Home-Sharing: $850-$1,030 annually

To apply for an extended homesharing registration, you must have maintained a regular valid homesharing registration for a minimum of six months or have hosted for a minimum of 60 days, have no more than one citation within the previous three years, and have no suspensions or revocations of your registration within the previous two years.

Los Angeles vacation rental owners need to pay a TOT of 14% of the listing price including cleaning fees. If you rent out your property on Airbnb, the listing platform collects and remits this tax on your behalf.

Los Angeles County Unincorporated Areas

It's important to note that unincorporated areas of Los Angeles County have different rules. Short term rentals are limited to primary residences with a 90-day limit for unhosted rentals. Hosts must register with the County Treasurer and Tax Collector.

5. San Jose, California Short Term Rental Laws

San Jose has some of the most conducive California short term rental laws by city. The San Jose Municipal Code defines incidental transient occupancy as the right of use of any room or rooms for dwelling, sleeping, or lodging purposes by a transient user.

Both owner-occupied and non-owner occupied short term rentals are allowed in the San Jose market though they face different regulations. In specific, in case the host is not present, there is an annual limit of 180 calendar days on incidental transient occupancy. In case the host is present, the property can be rented out on a short term basis throughout the year.

Occupancy Limits:

• With host present: 3 guests in a one-family dwelling or mobile home, 2 guests per dwelling unit in multi-family dwellings
• Without host present: 2 persons (studio), 3 persons (1 bedroom), plus 2 persons for each additional bedroom, maximum 10 persons total

Unlike most other California cities, San Jose does not require Airbnb hosts to obtain a short term rental license or permit. Nevertheless, they need to get a general business license.

San Jose Airbnb hosts need to pay business tax in addition to a TOT of 10%.

6. Oakland, California Short Term Rental Laws

The City of Oakland currently has very restrictive vacation rental regulations, with new regulations expected to be finalized by spring 2025. Short term rentals are not defined as a category in the local legislation, so Airbnb-style properties fall under Bed and Breakfast Residential Activities or Transient Habitation Commercial Activities.

Current Oakland regulations prohibit any rental of residential properties for periods of less than 30 consecutive days in most zones. Properties rented for under 30 days are classified as Transient Habitation, which requires a Conditional Use Permit (CUP) and is only allowed in designated zones in downtown, along the waterfront, near the airport, along the I-880 freeway, and in Specific Plan areas.

CUP Requirements:

• Application fees start at $2,500
• Multi-month approval process
• Public hearing required
• Registration fee: $500 initial, $250 annual renewal

In addition to paying business tax, owners of short term rental properties also need to pay TOT at a rate of 14% of the total rent charged.

Overall, the Oakland short term rental laws currently do not allow non-owner occupied vacation rentals in most areas, which makes the City suboptimal for investors until the new regulations are finalized.

7. Santa Ana, California Short Term Rental Laws - BANNED

The City of Santa Ana completely banned short term rentals in April 2024. The city council voted unanimously to prohibit all rentals of less than 30 days in response to concerns about neighborhood impacts and housing availability.

Prior to the ban, over 1,100 short term rentals were operating in Santa Ana. The city had previously been one of the most favorable California markets due to lack of specific regulations.

Current Status:

• All short term rentals are prohibited
• Violations subject to fines up to $5,000
• Possible jail time up to 6 months
• TOT rate of 11% (when it was allowed)

This represents a complete reversal from the city's previous position and serves as a warning to investors about the volatility of local regulations.

8. Lake Tahoe, California Short Term Rental Laws

The Lake Tahoe region has experienced significant regulatory changes in 2025, particularly in South Lake Tahoe.

South Lake Tahoe - Major 2025 Changes

The City of South Lake Tahoe's vacation rental landscape changed dramatically in 2025. Measure T, which had effectively banned vacation rentals in residential areas since 2018, was struck down by the El Dorado County Superior Court in March 2025. The city declined to appeal in April 2025.

New Ordinance (Effective July 17, 2025):

• 150-foot buffer zone required between STR properties (replacing permit caps)
• Preferred applicants (previous permit holders) get priority starting June 23, 2025
• General applications open August 23, 2025
• Maximum 150 permits issued per month initially
• Occupancy limit: 2 per bedroom plus up to 5 children under 13

Fees:

• Annual permit fees: $200-$1,335 based on occupancy
• TOT: 10% (12% at redevelopment properties)
• Tourism Improvement District fee: $5.50 per night for agent-managed properties

North Lake Tahoe (Placer County)

Placer County has maintained its cap-based system with some updates:

• Overall inventory cap: 3,900 permits
• Current status: Approximately 3,304 licensed STRs, about 500 permits still available (as of March 2025)
• Owner-occupied properties exempt from cap
• 30-day minimum rental requirement once cap is reached (except owner-occupied)
• Fire inspection fees: $507.02 for interior inspection
• TOT rate: 10%
• Permits are non-transferable upon ownership change

9. Temecula, California Short Term Rental Laws

The City of Temecula prohibits short term rentals within the city altogether. A short term rental is defined as a dwelling unit shared in whole or in part for temporary occupancy for less than 30 consecutive days. This applies to both whole homes and rooms listed on platforms like Airbnb and Vrbo.

Violators who try to operate a Temecula short term rental business illegally face a fine of $1,000 per day.

10. Irvine, California Short Term Rental Laws

Similar to Temecula, the City of Irvine prohibits short term rentals within all residential zones as well as within all other zoning districts in which residential uses are permitted or conditionally permitted. A short term rental is defined as renting out a dwelling unit for a period of less than 31 consecutive days.

Violations may be issued administrative fees of $1,000 per day.

11. Long Beach, California Short Term Rental Laws

The City of Long Beach defines a short term rental as a residential dwelling unit or portion of it offered to a paying guest by a short term rental operator for 30 or less consecutive days. This excludes hotels, motels, inns, and bed and breakfast inns.

In Long Beach a person cannot operate more than one primary residence short term rental and more than one non-primary residence short term rental. Moreover, in a multi-family property the number of short term rentals should not exceed the number of dwelling units. Un-hosted stays in primary residences are limited to a total of 90 days per year.

To operate a legal Long Beach Airbnb business, you need to apply for a short term rental registration to be issued by the City. There is a non-refundable application fee of $250. Registrations are valid for one year, after which they need to be renewed. Registrations are non-transferable.

Importantly, the total number of non-primary residence short term rental registrations is capped at 800. In the coastal zone, this number is limited to 350.

Long Beach Airbnb hosts need to pay a TOT of 13% on a monthly basis.

Additional California Cities to Consider

While we've covered the major markets, here are quick updates on other California cities with notable short term rental activity:

• San Francisco: Requires registration, limits rentals to 90 days per year unless host is present. TOT rate of 14% plus additional fees.
• Sacramento: Allows short term rentals with permit, requires $1 million liability insurance, TOT rate varies by area.
• Santa Barbara: Limits vary by zone, some areas prohibit entirely, others allow with restrictions. Coastal zone has additional requirements.
• Monterey County: New regulations in September 2024 include permit requirements, limits on number of STRs, and bans in some areas.

Conclusion

While the California short term rental laws do not impose much regulation on the state level, some California cities have the most restrictive and prohibitive Airbnb laws across the nation. Nevertheless, vacation rental homes are legal and relatively unrestricted in many other California markets.

If you're looking to start a profitable short term rental business, you definitely need to consider the Golden State. Just make sure to choose a market where you can operate a non-owner occupied vacation rental in a legal manner. Markets like San Jose, parts of San Diego, and certain areas around Lake Tahoe still offer opportunities for investors.

Remember that regulations can change quickly, as we've seen with Santa Ana's complete ban and South Lake Tahoe's reversal. It's essential to stay informed about local regulations and work with professionals who understand the market.

If you're interested in turning your property into a short-term rental, but you're not sure if it's legal under Airbnb regulations, Awning can help. As a nationwide property management company, we are well-versed in the laws and regulations surrounding short-term rentals. Contact an Awning agent today and let us help you determine if your property qualifies. Call or text 415-941-5206