Carmel By The Sea Short-Term Rental Regulations

Last verified: 2026-04-07
TL;DR
Carmel By The Sea requires an STR permit — 2 types available with no primary-residence requirement. Combined tax rate is 10%. No annual day limit.
⚠ Before you rely on the summary
New STR permits are generally no longer issued here — the market is limited to existing (legacy/grandfathered) permits, so new operators may be unable to enter. Confirm current permit availability before relying on the figures below.
Disclaimer
This information is provided for general informational purposes only and does not constitute legal, tax, or regulatory advice. Short-term rental regulations change frequently. Always verify current requirements with your local government before listing your property or making investment decisions.
Key Requirements at a Glance
Permit ✓ Required — Transient Rental Permit (Legal Nonconforming) (No fee (closed to new applications — grandfathered permits only)) — See below for other permit types
Primary Residence ✗ Not required
Annual Day Limit No limit
Tax Rate 10%
Max Penalty Infraction, per day of violation. California Government Code § 36900(d) caps fines for short-term rental ordinance infractions at $1,500 (first violation), $3,000 (second within one year), and $5,000 (each additional within one year).
Insurance Not required

New to short-term rentals? Jump to the compliance checklist →

Permit & Licensing

Which permit type applies to you?

Transient Rental Permit (Legal Nonconforming)

FeeAmount
Initial costNo fee (closed to new applications — grandfathered permits only)
RenewalNo renewal required (permit valid in perpetuity)

This permit type does not require primary residence. Zoning restriction: Permitted in CC, SC, RC, and R-4 districts only. Prohibited in R-1 (single-family residential) zone.

Transient Rental Conditional Use Permit (Housing Incentive)

FeeAmount
Initial costConditional use permit fee (not published; inquire with Planning Dept)
RenewalConditional use permit renewal fee (not published; inquire with Planning Dept)

This permit type does not require primary residence. Zoning restriction: Permitted in CC, SC, RC, and R-4 districts only. Requires creation of 3 new rental units per 1 STR permit.

Application Process

Grandfathered — no new applications. Existing permits transfer with property sale.

Note: Document requirements vary by permit type. See individual permit sections above for eligibility details.

Tax Obligations

TaxRateAuthority
Transient Occupancy Tax (TOT) 10% City of Carmel-by-the-Sea

Combined rate: 10% of gross rental income.

Collection: Operator collects from guests and remits to city

Rental Limits

Carmel By The Sea does not impose an annual cap on the number of nights you can rent.

Zoning & Restrictions

Insurance & Safety

Insurance

Carmel By The Sea does not require short-term rental operators to carry specific insurance. Standard homeowner policies often exclude short-term rental activity, so many hosts obtain dedicated short-term rental or landlord liability coverage.

Penalties for Non-Compliance

Each day a residential property is used in violation of the short-term-rental prohibition is a separate infraction. California Government Code § 36900(d) caps fines for short-term rental ordinance infractions at $1,500 (first violation), $3,000 (second within one year), and $5,000 (each additional within one year).

Platform Requirements

Advertising unpermitted transient rentals is prohibited under CMC 17.28.040.

Compliance Checklist

Follow these steps to legally operate a short-term rental in Carmel By The Sea:

  1. Determine your permit type. Carmel By The Sea has 2 permit types. Identify which applies to your property (Transient Rental Permit (Legal Nonconforming), Transient Rental Conditional Use Permit (Housing Incentive)).
  2. Note: New STR applications are not currently accepted. Grandfathered — no new applications. Existing permits transfer with property sale.
  3. Register for tax accounts. Set up lodging tax accounts with City of Carmel-by-the-Sea Finance Department.
  4. Collect and remit taxes. 10% on all bookings.

Frequently Asked Questions

Do you need a permit to run an Airbnb in Carmel By The Sea?
Operating a short-term rental in Carmel By The Sea requires a permit, and Carmel By The Sea has restricted or paused new short-term rental permits (a moratorium or grandfathering applies). Confirm current availability with the city before buying a property to rent.
Are there major restrictions on short-term rentals in Carmel By The Sea?
Yes — Permitted only in CC (Central Commercial), SC (Service Commercial), RC (Resort Commercial), and R-4 (Multi-Family) districts. Review the full rules above before listing.
Does Carmel By The Sea require a short-term rental to be your primary residence?
Carmel By The Sea is not issuing new short-term rental permits, so in practice only previously permitted (grandfathered) properties can operate — regardless of whether it is your primary residence.
How many days a year can you short-term rent in Carmel By The Sea?
Carmel By The Sea does not cap the number of nights per year you can short-term rent, though permitting, zoning, and occupancy rules still apply.
What taxes do you pay on a short-term rental in Carmel By The Sea?
Short-term rental stays in Carmel By The Sea are subject to a 10% Transient Occupancy Tax (TOT). Hosts are legally responsible; many booking platforms collect and remit it automatically on the host's behalf.
What are the penalties for short-term rental violations in Carmel By The Sea?
Penalties run up to $5,000 per violation (see the Penalties section for the full schedule).

Official Sources

  1. Short-Term Rental Information - City of Carmel-by-the-Sea
  2. Carmel-by-the-Sea Municipal Code - Zoning and Transient Occupancy Tax (CMC 17.08, 17.14, 3.32)
  3. California Government Code § 36900 — Violation of city ordinance; fines (short-term rental infractions, subd. (d))