New lodging tax rates for San Diego short-term rentals take effect May 1, 2025

San Diego’s transient occupancy tax (TOT) rate will increase May 1, 2025. The tax, which is paid by guests of hotels, RV parks, and short-term rentals (STRs), was approved by voters in 2020, but its implementation was delayed by legal challenges. 

A Superior Court judge ruled in favor of the measure in 2024, though some aspects of the case have yet to be decided. The city said it would set aside the funds collected from the tax until the case is fully resolved.

The ballot measure created three tax zones with three different rates: 11.75%, 12.75%, and 13.75%, respectively. The different rates are determined based on proximity to the San Diego Convention Center, with higher rates in zones closer to the center. The tax is expected to generate about $82 million in fiscal year 2026, with about $1.04 billion in additional revenue over the first 10 years.

The majority of revenues generated from the rate hike will go toward expanding the convention center — or for infrastructure improvements if the convention center’s long-delayed expansion project doesn’t go forward.

For the first five years, funds from the tax increase are earmarked for the convention center (59%) and homelessness services (41%). For years six through 10, 59% of the funds will go to the convention center, 31% to homelessness services, and 10% to street repairs and infrastructure improvements.

STR hosts in San Diego are required to collect TOT from guests and remit it to the city, unless an STR platform collects the tax on operators’ behalf. Both Airbnb and Vrbo collect TOT for their San Diego listings

San Diego’s STR law went into effect in 2023 after years of controversy and legal wrangling. STR operators are required to obtain a permit, with only one STR permit per individual. The law caps the total number of whole-home vacation rentals at 1% of the city’s housing stock, meaning rentals are limited to around 5,400. In Mission Beach, vacation rentals are allowed to equal 30% of the neighborhood’s housing stock, meaning around 1,100 STRs are permitted. 

License limits and caps don’t apply to hosts who rent out their homes for fewer than 20 days each year or who offer hosted rentals where they’re on premises during guests’ stays.

Short-term rental permit fees — ranging from $100 for hosts who rent out their properties for less than 20 days a year to $1,000 for operators who rent out whole homes for more than 20 days per year — help fund enforcement.

STR hosts in San Diego are required to collect TOT from guests and remit it to the city, unless an STR platform collects the tax on operators’ behalf. Both Airbnb and Vrbo collect TOT for their San Diego listings

San Diego’s STR law went into effect in 2023 after years of controversy and legal wrangling. STR operators are required to obtain a permit, with only one STR permit per individual. The law caps the total number of whole-home vacation rentals at 1% of the city’s housing stock, meaning rentals are limited to around 5,400. In Mission Beach, vacation rentals are allowed to equal 30% of the neighborhood’s housing stock, meaning around 1,100 STRs are permitted. 

License limits and caps don’t apply to hosts who rent out their homes for fewer than 20 days each year or who offer hosted rentals where they’re on premises during guests’ stays.

Short-term rental permit fees — ranging from $100 for hosts who rent out their properties for less than 20 days a year to $1,000 for operators who rent out whole homes for more than 20 days per year — help fund enforcement.

Avalara MyLodgeTax can help San Diego STR operators comply with their TOT obligations. 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.