California · Carmel-by-the-Sea

Carmel-by-the-Sea

city Mostly prohibited Verified · last verified 2026-07-15

Short-term ("transient") rentals — any residential unit occupied for fewer than 30 consecutive days for a fee — are broadly prohibited in Carmel-by-the-Sea. Under Ordinance No. 2019-003 (considered at the Oct. 10, 2019 public hearing; amends CMC chapters 17.08, 17.14, 17.28, 17.68 and 17.70, which together constitute the city's Zoning Ordinance / Local Coastal Program) transient lodging of residential dwellings for remuneration is prohibited in the Single-Family Residential (R-1) district (CMC 17.08.060) and in the Commercial CC, SC and RC districts (CMC 17.14.040(W)), except lawfully permitted hotels, motels and transient rentals. The only ways a residential unit may legally operate as a transient rental are (1) as a "legal nonconforming" use permitted before the adoption of Ordinance 2019-003 (classified under CMC 17.68.090, subject to CMC 17.36; the city STR webpage further states these are allowed in perpetuity and transfer with sale of the property but cannot relocate), or (2) as a "housing-incentive" transient rental in the CC/SC/RC/R-4 districts — one transient-rental unit permitted for the creation of three new rental units, with two of the three new units required to be housing classified as "low-income" per AMBAG, requiring a conditional use permit (CMC 17.14.040(W)(1)(b)&(d)). No new stand-alone STRs are obtainable outside the housing-incentive pathway. Per the city's "Transient Rentals in the Commercial District" handout, any legally-operating transient rental requires a city business license, is issued a "Transient Occupancy Registration Certificate," must provide one off-street parking space per unit, and is subject to the city's 10% Transient Occupancy Tax (CMC Chapter 3.32), remitted bi-monthly. Advertising an unpermitted transient rental is prohibited citywide (CMC 17.28.040), each day a separate offense; use of residential property as an unpermitted transient rental is an infraction for each day of violation (CMC 17.08.060). NOTE: the Ordinance 2019-003 document obtained is the pre-certification version with blank adoption/effective-date lines (effective date was pending California Coastal Commission certification), so the exact effective date is not quote-anchored. A proposed 2% increase to a 12% TOT has been discussed for a Carmel ballot measure (reporting circa 2024–2026) but is not confirmed enacted as of July 2026; 10% is used as the current statutory rate.

Not legal advice. Last verified 2026-07-15 · sources linked below.

Requirements checklist

  • city City Business License (to convert a unit to a transient rental) Conditional
    Fee: — · Renewal: — · Applies to: Operators of legally-permitted transient rentals (legal-nonconforming or housing-incentive units) in commercial/R-4 districts · official page ↗
  • city Transient Occupancy Registration Certificate Required
    Fee: — · Renewal: — · Applies to: Operators of legally-permitted transient rentals (issued after business-license approval) · official page ↗
  • city Conditional Use Permit (housing-incentive transient rentals) Conditional
    Fee: — · Renewal: — · Applies to: New transient rentals sought as a housing-creation incentive in CC/SC/RC/R-4 districts · official page ↗
  • city One off-street parking space per unit Required
    Fee: — · Renewal: — · Applies to: All permitted transient rentals in all districts · official page ↗
  • city California Building Code Hotel/Motel (R-1) occupancy compliance Conditional
    Fee: — · Renewal: — · Applies to: Buildings with 3 or more units where any unit is used as a transient rental · official page ↗

Taxes

TaxRateAdministered byAirbnb remitsVrbo remits
Transient Occupancy Tax (TOT) 10% City of Carmel-by-the-Sea (Community Planning & Building Dept / Finance), CMC Chapter 3.32

Lodging-tax estimator

Estimate the combined transient/lodging tax (~10.0%) on a stay in Carmel-by-the-Sea. Estimate only — not tax advice.

Operating rules

Primary residence
No
Min stay (nights)
Max nights / year
Max occupancy
Zoning-restricted
Yes
Cap on licenses

Grandfathering: yes

Zoning: Transient lodging of residential dwellings for remuneration is prohibited in the Single-Family Residential (R-1) district (CMC 17.08.060) and in the Commercial CC, SC and RC districts (CMC 17.14.040(W)), except lawfully permitted hotels, motels and transient rentals. In the R-4 (multi-family) and commercial districts, only two transient-rental categories are allowed: 'Legal Nonconforming' (permitted prior to the adoption of Ordinance 2019-003, classified under CMC 17.68.090) and 'Housing Incentive' (via conditional use permit under CMC 17.14.040(W)(1)(b)). No new stand-alone STRs are permitted outside the housing-incentive pathway. Rentals of 30 or more consecutive days are not 'transient' and fall outside these restrictions.

  • The 30-day line is definitional, not an STR booking minimum: 'Transient' = 'A period of time less than 30 consecutive days' (CMC 17.70.020); a booking of 30+ consecutive days is a permitted long-term rental, not a transient rental. min_stay_nights is left null because there is no 'STR-allowed-with-minimum-stay' regime — sub-30-day residential rental is prohibited, not merely minimum-limited. The city STR webpage states 'no home or subordinate unit may be rented for less than 30 consecutive days in the residential district.'
  • Grandfathering: transient rentals permitted before the adoption of Ordinance 2019-003 are classified as legal nonconforming (CMC 17.68.090, subject to CMC 17.36). Per the city STR info webpage they are allowed in perpetuity and may transfer to a new owner on sale but cannot relocate. The 'in perpetuity'/'transferable' characterization is sourced to the city STR webpage, not to the ordinance text itself.
  • De facto freeze on new licenses: the only route to a NEW transient-rental unit is the housing-incentive program (one transient-rental unit per three new rental units created, two of the three new units low-income), so new-STR supply is structurally capped rather than set by a numeric license cap.
  • A residential unit occupied as a transient rental is classified as Group R-1 occupancy under the building code if the site contains more than one transient rental unit (CMC 15.04.020(16), per CMC 17.70.020 / 17.68.030). Separately, the city building handout states that a building containing 3 or more units where any unit is a transient rental is a Hotel/Motel R-1 occupancy under the California Building Code. Both statements are quoted from their respective official sources.
  • Housing-incentive low-income detail DISCREPANCY (adversarial catch): Ordinance 2019-003 text at CMC 17.14.040(W)(1)(b) states 'two of the new units on the site will be used as housing classified as low-income'; the city's STR summary webpage instead describes one 'low income' + one 'moderate income' unit. The ordinance (controlling legal text) is used here; the webpage summary differs.
  • The city's undated 'Transient Rentals in the Commercial District' handout states the Zoning Code was 'silent' on the commercial districts and that the City 'determined that they are not prohibited,' requiring only a business license. This reflects pre-2019 policy and is superseded for new units by Ordinance 2019-003, which prohibits transient lodging in CC/SC/RC except the legal-nonconforming and housing-incentive categories. The handout remains the current source for the TOT/business-license process applicable to legally-permitted transient rentals.

Enforcement

Active enforcement
unknown
Fines
OFFICIAL (quote-anchored to Ordinance 2019-003): Using, or allowing the use of, residential property as an unpermitted transient rental in the R-1 district is an infraction for each day in which such property is used, or allowed to be used, in violation (CMC 17.08.060(A) liability/agents; (B) infractions). Posting, publishing, circulating, broadcasting or maintaining any advertisement of an unpermitted transient rental is prohibited citywide, and each day an advertisement is maintained in violation is a separate offense (CMC 17.28.040(a),(c)). 'Responsible party' expressly excludes online hosting platforms/companies (CMC 17.28.040(b)(2)). UNVERIFIED / needs_review: local reporting (Carmel Pine Cone; Preserve Monterey Neighborhoods) has described escalating monetary penalties (e.g., percentages such as 175%/275%/375% of the advertised nightly rate). These figures are NOT confirmed against an adopted fine schedule in the municipal code and should not be treated as authoritative.

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Frequently asked questions

Is Airbnb legal in Carmel-by-the-Sea?
Short-term ("transient") rentals — any residential unit occupied for fewer than 30 consecutive days for a fee — are broadly prohibited in Carmel-by-the-Sea. Under Ordinance No. 2019-003 (considered at the Oct. 10, 2019 public hearing; amends CMC chapters 17.08, 17.14, 17.28, 17.68 and 17.70, which together constitute the city's Zoning Ordinance / Local Coastal Program) transient lodging of residential dwellings for remuneration is prohibited in the Single-Family Residential (R-1) district (CMC 17.08.060) and in the Commercial CC, SC and RC districts (CMC 17.14.040(W)), except lawfully permitted hotels, motels and transient rentals. The only ways a residential unit may legally operate as a transient rental are (1) as a "legal nonconforming" use permitted before the adoption of Ordinance 2019-003 (classified under CMC 17.68.090, subject to CMC 17.36; the city STR webpage further states these are allowed in perpetuity and transfer with sale of the property but cannot relocate), or (2) as a "housing-incentive" transient rental in the CC/SC/RC/R-4 districts — one transient-rental unit permitted for the creation of three new rental units, with two of the three new units required to be housing classified as "low-income" per AMBAG, requiring a conditional use permit (CMC 17.14.040(W)(1)(b)&(d)). No new stand-alone STRs are obtainable outside the housing-incentive pathway. Per the city's "Transient Rentals in the Commercial District" handout, any legally-operating transient rental requires a city business license, is issued a "Transient Occupancy Registration Certificate," must provide one off-street parking space per unit, and is subject to the city's 10% Transient Occupancy Tax (CMC Chapter 3.32), remitted bi-monthly. Advertising an unpermitted transient rental is prohibited citywide (CMC 17.28.040), each day a separate offense; use of residential property as an unpermitted transient rental is an infraction for each day of violation (CMC 17.08.060). NOTE: the Ordinance 2019-003 document obtained is the pre-certification version with blank adoption/effective-date lines (effective date was pending California Coastal Commission certification), so the exact effective date is not quote-anchored. A proposed 2% increase to a 12% TOT has been discussed for a Carmel ballot measure (reporting circa 2024–2026) but is not confirmed enacted as of July 2026; 10% is used as the current statutory rate.
Do I need a license or registration for a short-term rental in Carmel-by-the-Sea?
Yes — Carmel-by-the-Sea requires: City Business License (to convert a unit to a transient rental); Transient Occupancy Registration Certificate; Conditional Use Permit (housing-incentive transient rentals). See the requirements checklist for fees, renewal, and official links.
What taxes apply to short-term rentals in Carmel-by-the-Sea?
Transient Occupancy Tax (TOT) (10%) — roughly 10.0% combined. Use the lodging-tax estimator on this page for a specific stay.

Official sources

Informational summary of publicly available sources; not legal advice. Verify against the linked official sources.