Carmel By The Sea Short-Term Rental Regulations
| 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 (administrative citation schedule not publicly available; $25,000 settlement recorded for one violation case) |
| Insurance | Not required |
New to short-term rentals? Jump to the compliance checklist →
Permit & Licensing
- Transient Rental Permit (Legal Nonconforming) — Existing grandfathered permit (closed to new applications since 2019). Valid in perpetuity — no new permits are issued under this type.
- Transient Rental Conditional Use Permit (Housing Incentive) — New STR permit path — requires developer to create 3 affordable housing units per STR permit issued (CC/SC/RC/R-4 zones only)
Transient Rental Permit (Legal Nonconforming)
| Fee | Amount |
|---|---|
| Initial cost | No fee (closed to new applications — grandfathered permits only) |
| Renewal | No renewal required (permit valid in perpetuity) / No renewal required |
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)
| Fee | Amount |
|---|---|
| Initial cost | Conditional use permit fee (not published; inquire with Planning Dept) |
| Renewal | Conditional use permit renewal fee (not published; inquire with Planning Dept) / Annual |
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
| Tax | Rate | Authority |
|---|---|---|
| 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
STRs prohibited in R-1 (single-family residential) zone. Permitted only in CC (Central Commercial), SC (Service Commercial), RC (Resort Commercial), and R-4 (Multi-Family) districts. New permits require creation of 3 affordable rental units per STR permit.
Penalties for Non-Compliance
Infraction per day for violations of residential STR prohibition. $25,000 settlement recorded for one violation case.
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:
- 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)).
- Note: New STR applications are not currently accepted. Grandfathered — no new applications. Existing permits transfer with property sale.
- Register for tax accounts. Set up lodging tax accounts with City of Carmel-by-the-Sea Finance Department.
- Collect and remit taxes. 10% on all bookings.