California · Monterey County

Monterey County

Short-term rentals ("Vacation Rentals," defined by the County as the use, by any person, of all or a portion of residential property for 30 calendar days or less) in the unincorporated area of Monterey County are ALLOWED but must be licensed. Inland regulations — Vacation Rental Operation License (Monterey County Code Chapter 7.120) plus Inland Vacation Rental Regulations (MCC Section 21.64.290) — went into effect October 14, 2024. Parallel Coastal Zone regulations (MCC Section 20.64.290; Ordinance No. 5439) were adopted by the Board of Supervisors on September 23, 2025 and took effect October 24, 2025. The California Coastal Commission CERTIFIED the coastal ordinance on August 13, 2025 (6-2 vote), so the coastal regime is now operative (superseding the prior discretionary "similar use" Coastal Development Permit regime that previously governed coastal STRs). Every vacation rental must obtain (1) a Vacation Rental Operation License from Housing & Community Development ($965 base / $1,152.40 total, valid one year, renewed annually; plus a possible $301 Environmental Health Bureau fee if on well/septic), (2) a Transient Occupancy Tax (TOT) Certificate, and (3) a Business License from the Treasurer-Tax Collector. Only detached single-family dwellings (including manufactured/mobile homes on permanent foundations) qualify; duplexes, condos, multi-family, ADUs/JADUs, agricultural/farmworker housing, and RVs/trailers are ineligible. Three types: Homestay (owner-occupied primary residence, owner present during the stay, no cap, max 1 rental contract per 7 days); Limited Vacation Rental (non-hosted whole-house, up to 3 rentals per 12 months, no cap, max 1 contract per 7 days); Commercial Vacation Rental (unlimited non-hosted, requires a Use Permit (inland) or Coastal Development Permit (coastal), CAPPED by planning area, one CVR per owner, prohibited in Big Sur and in the residential zoning districts of the Carmel Valley Master Plan). County TOT is 10.5% of rent (a Board-approved measure to raise the unincorporated-area TOT to 12.5% is slated for the November 2026 ballot but is NOT yet enacted). LITIGATION: In Monterey County Vacation Rental Alliance v. County of Monterey (Monterey County Superior Court Case No. 24CV004922), the County suspended enforcement (without prejudice) of two challenged provisions — the non-resident-owner homestay differential (Dormant Commerce Clause) and the natural-person-vs-entity ownership differential (MCC 7.120.040.W; Equal Protection). A tentative ruling reported June 3, 2026 (Judge Thomas Wills) found the ordinance ran afoul of the Dormant Commerce Clause and invalidated the corporate/out-of-state ownership restrictions, while UPHOLDING the balance of the ordinances (homestay owner-presence requirement, the 4% CVR cap, the Carmel Valley residential-zone ban, and use-permit rules); the ordinances otherwise remain in effect and enforceable. Consequently, the code's natural-person/trustee ownership requirement is currently NOT being enforced (litigation status is news-sourced and evolving; as of verification the County website still displayed the interim suspension notice and had not yet reflected the ruling). These regulations apply only to the unincorporated county; incorporated cities (Carmel-by-the-Sea, Del Rey Oaks, Gonzales, Greenfield, King City, Marina, Monterey, Pacific Grove, Salinas, Sand City, Seaside, Soledad) have their own rules.

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