San Diego Airbnb Rules

Like many cities, San Diego is uncertain how to handle short-term vacation rentals in residential neighborhoods. There are over 6,000 short-term listings in the City on Air BnB and similar sites. On one hand, San Diego wants to tax them all. On the other hand, they are illegal, at least for the time being.

A bed and breakfast permit it technically required for a short-term rental (less than 30 days). A bed and breakfast permit is not allowed in many neighborhoods, and in others is available only after the expenditure of substantial time and expense, in many cases including the renovation of the property. No Air BnB or other online rental in San Diego has a bed and breakfast permit. The fines for renting a room without a permit can be substantial – up to $250,000. One homeowner in the mid-City area who rents two bedrooms on Air BnB was fined $25,000 for operating a bed and breakfast without a permit, although this is the only known enforcement action of any consequence.

In late 2015 or early 2016 the City Council is expected to adopt new regulations for short-term rentals in residential neighborhoods. In the meantime, the City is only enforcing the bed and breakfast rules when neighbors complain, typically for noise, parking or “strangers” in the neighborhood.

And the City continues to collect the tax on what is essentially an illegal activity. The transit occupancy tax (TOT), similar to a sales tax, is collected from the visitor and paid over to the City. The tourist marketing district (TOD) assessment is levied on the owner. The combined TOT and TMD assessment is 11.05% of the rental, payable monthly. Each owner must obtain a Transient Occupancy Registration Certificate from the City (available online) before renting a room.

In addition to the TOT and TMD assessment, the homeowner must obtain a Business Tax Certificate from the City and pay an annual rental business tax, which is about $55 per bedroom.

Bottom line, until San Diego finalizes new regulations for Air BnB and similar rentals, you are generally safe to rent a bedroom or two as long as you pay the taxes and the neighbors don’t complain.

October 2015