Placer County, California, caps short-term rentals

A new vacation rental law in Placer County, California, will cap the number of short-term rental permits at 3,900 and require all short-term rental operators to hold a permit. The cap, equal to around 25% of the region’s 15,000 homes, was passed due to concerns about housing affordability, a major issue for the Lake Tahoe area after an influx of pandemic visitors drove up housing prices.

Short-term rentals that are owner-occupied — around 3% of North Tahoe vacation properties — will not be included in the cap as long as they’re in good standing and have a current transient occupancy tax (TOT) certificate.

The new ordinance goes into effect on March 11, the cap begins on March 31, and the county will begin short-term rental permit renewal on April 1.

Current short-term rental permit holders have 90 days after March 31 to apply for renewal and will get priority for new permits, with other permits issued on a first-come, first-served basis. Vacation rentals that were issued approved exemptions from permit requirements under the county’s previous short-term rental regulations will be offered a one-time “safe harbor” period of 90 days from March 31. Within this time frame, operators of these properties must apply for a permit, which will be processed on a first-come, first-served basis. These permits will count toward the permit cap.

In summer 2021, Placer County placed a moratorium on issuing new short-term rental permits as it reviewed its 2020 vacation rental ordinance and worked on the new rules. Before the moratorium, the county had issued permits for around 2,500 vacation rental properties. The county estimates the number of operating short-term rentals to be closer to 3,900. The difference may be due partially to the fact that some types of short-term rentals were exempt from permit requirements under the old rules, although rentals may also be operating illegally without permits.

In addition to obtaining a county short-term rental permit, Placer County vacation rental hosts must follow county rules including regulations on noise, garbage collection, parking, occupancy, and special events. To get a permit, vacation rentals must be inspected by the fire department to verify fire code compliance as well as the presence of smoke and carbon monoxide detectors. Short-term rental owners must also designate a local contact who can be on hand to respond to calls and complaints.

Hosts are also required to apply for a TOT certificate, collect TOT from guests, and file quarterly returns. While Airbnb collects lodging taxes in nearby El Dorado County, neither Airbnb nor Vrbo collect TOT for hosts in Placer County, leaving hosts solely responsible for tax compliance.

Short-term rentals have been a hot topic in the Lake Tahoe area for years. Several communities in the area have passed moratoriums or new rules, including South Lake Tahoe in California and the town of Truckee and Douglas County in Nevada.

MyLodgeTax can help short-term rental hosts automate lodging tax to streamline and simplify their lodging tax compliance. For more on lodging taxes in California, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.

Cover photo by Canva