The City's regulations of short-term rentals are designed to:
- Maintain the long-term rental housing stock in the City.
- Provide residents an opportunity to generate income.
- Provide visitors to the City another way to experience the local community.
- Ensure that such short-term rental activities do not become a nuisance, or threaten the public health, safety or welfare of neighboring properties.
- Safeguard the residents of Milpitas by ensuring that short-term rental activities do not threaten the character of residential neighborhoods.
- Ensure the collection and payment of Transient Occupancy Taxes ("TOT").
On March 3, 2020 the Milpitas City Council adopted an Ordinance that created the short-term rental (STR) program. You can view the ordinance on the Municode library website.
- Questions on Short-Term Rental Operating Standards: For questions on Short-Term Rental regulations or the permit application process, please email Short Term Rentals.
- Questions on remittance of Transient Occupancy Tax (TOT): call 408-586-3100
Register as a Host
The Short-Term Rental Permit application consists of an online application and the submittal of several supplemental forms. You must complete the supplemental forms prior to initiating the online application. Follow these steps to operate an STR in Milpitas.
You can register as a host on the Online Portal.
Qualified Dwelling Unit
A qualified dwelling unit is a structure that the City has legally permitted as habitable space. The table below lists typical examples of some common permitted structures and their eligibility for STR use. Under the City’s STR Program, accessory dwelling units (ADU) may not be operated as STRs. If you are unsure whether your STR is legally permitted as habitable space, please contact the City’s Building Department to confirm before you apply. Your application fee will not be refunded or reimbursed if we discover that you are renting an unqualified structure.
Qualified for STR Use:
- Single Family Dwelling or portion thereof
- Individual units in a multi-family property or portion thereof
- Maid Quarters
- Apartment or portion thereof
Not Qualified for STR Use:
- Single-Room-Occupancy (SRO) or dormitory
- Below-Market-Rate (BMR) or Public Housing unit
- Commercial and industrial spaces are not permitted
- Pool houses
- Sleeping quarters in outdoor areas, including treehouses and vehicles
- ADUs or Junior ADU
STRs Must Be Noted
You must live in the actual dwelling unit (e.g., apartment, suite, condominium) that you wish to offer as a short-term rental, as either an owner or a tenant. If your property features multiple dwelling units, you may not live in one dwelling unit while operating short-term rentals in a different dwelling unit. This is a core requirement of the City's short-term rental rules intended to preserve long-term housing availability/opportunities and preserve neighborhood character.
- An Operator may only conduct a Hosted Rental. Unhosted Rentals are prohibited in STRs.
- If you are a new resident, you must have resided in this specific dwelling for at least 60 consecutive days prior to your application.
- If you own/rent a multi-unit building, you may only register the specific residential unit (apartment, suite, condominium) in which you reside.
Review Your Agreement
Many private agreements such as leases, homeowner's association bylaws, and Covenants, Conditions and Restrictions (CC&Rs) prohibit subletting (or use of your dwelling unit as a short-term rental). While the City does not enforce these types of private agreements, the Planning Department strongly recommends that you review such agreements before submitting an application.
- If you are a renter and your dwelling unit is also subject to rent control rules, you may not make more than your monthly rent from short-term rental fees charged in the same month to guests.
Have Property Liability Insurance
You must have property liability insurance in the amount of no less than $500,000 or prove that property liability coverage in an equal or higher amount is being provided by any and all hosting platforms through which you will rent your unit. Proof of liability insurance is not required if hosting activity is only handled by a platform (website) that already extends similar liability coverage.
Resolve Any Code Violations
Ensure that your dwelling unit remains compliant with all Building, Housing, Planning, and other City codes. If your dwelling unit (apartment/suite) is located within an apartment, then the entire property (including other dwelling units) must be compliant and not subject to Code Enforcement.
Fines & Penalties for Illegal Short-Term Rental Housing
If you are not permitted, and you advertise/rent a dwelling unit for periods of less than 30 nights, you are violating the City's short-term rental laws and are subject to possible enforcement action, including substantial penalties
Violations of the City's short-term rental laws are subject to penalties of at least $1000 per day for each dwelling unit in violation. These daily penalties begin on the day that a Notice of Violation is issued by Code Enforcement and continue to accrue until the violation is fully abated. Repeat violations may be subject to escalated penalties and referral to the City's Attorney's Office for additional civil and/or criminal penalties.
To assist those who are considering operating an STR in the City of Milpitas, the following represent some (but not all) of the requirements that the host/operator will need to follow as outlined in the Ordinance. Please reference the Ordinance on the Municode Library for additional information.
Transient Occupancy Tax
The host/STR operator shall be required to collect, report, and pay a Transient Occupancy Tax (TOT) on a monthly basis to the City. These taxes are based on gross receipts of rented stays. Taxes can be paid through the same portal as registration. See "Transient Occupancy Tax" for more information.
Annual Application / Registration Fee
The fee for the City to review your STR application or any subsequent renewal application is $488. The annual term of STR registration shall commence on the date of the City-issued registration number.
Local Contact Person
The host/STR operator shall be available twenty-four hours per day, seven days a week or identify a local contact person who shall be available twenty-four hours per day, seven days a week for:
- Responding within one hour to complaints regarding the condition, operation, or conduct of the STR or its occupants; and
- Taking any remedial action necessary to resolve such complaints.
Maximum occupancy shall be two persons per bedroom plus one more person. The Operator shall not allow the STR to be used for any gathering where the number of persons will exceed the permitted maximum occupancy limits.
All marketing and advertising of a registered STR, including any listing on a hosting platform, shall clearly list the City-issued STR registration number.
Guest Information Posted
Each STR shall have a notice posted within the unit in a location clearly marked and accessible to the guest (e.g., posted on the refrigerator, included within a binder with additional information on the unit, etc.), containing the following information:
- The maximum number of occupants permitted in the unit;
- Parking capacity, location of parking spaces, and parking rules, if any;
- Trash and recycling pickup information;
- The name of the local contact and a telephone number at which that person may be reached on a twenty-four hour basis;
- Emergency contact information for summoning police, fire, or emergency medical services; and
- Evacuation plan for the unit showing emergency exit routes, exits, and fire extinguisher locations
- Use of all outdoor pools, spas, and hot tubs shall be prohibited between the hours of 10 pm and 7 am
- No sign shall be posted on the exterior of the STR premises to advertise the availability of the STR rental unit to the public.
The “How-To” Video is helpful to review before submitting your Short Term Rental application via the Host Compliance Online Permitting System.
- Documentation of Primary Residence:Two of the following documents must be provided as part of the registration application. The documents provided must indicate the host's name and address which should match the primary residence address and name on the STR registration application:
- Current Driver's License or State issued ID card with the address of the unit you wish to register
- Proof of Vehicle Registration with the address of the unit you wish to register
- Voter Registration
- Utility Bill (water or trash)
- Use the Santa Clara County Assessor website to look up your address and find your Assessor's Parcel Number (APN): 028-12-022
- Good Neighbor Manual (PDF) signed by the Owner
- Smoke Alarm and Carbon Monoxide Alarm Self Certification (PDF)
- A copy of your Online Business License Application or the email from staff with your account number
- Site and Floor Plan: A site plan indicating the dimensions of the parking space required for the STR and a Floor Plan indicating the number and location of bedrooms comprising the STR. See this Rental Unit Diagram Example (PDF).
- Proof of Liability: Proof of liability insurance in the amount of no less than $500,000 (if utilizing a Hosting Platform that provides equal or greater coverage proved this COI).
When you complete the online business registration, make sure to use the street address of your home where you plan to host short-term rentals as the "business location."
Include the apartment/condominium suite number or suffix, if applicable. For example: "222 49th Avenue Unit B." Do not use a post office box as the physical business location.
- For the business type field, choose: "Short-Term Rental"
- Indicate "YES" when asked if your business involves transient occupancy tax ("hotel taxes")
- Use SIC code 6519001 for the lessor of real property not elsewhere classified
- For the business name, you have a number of options, including using your own name (a fictitious business name, or "LLC" is not required)
- Please do not choose "exempt" for business licensing, as that option is typically reserved for non-profit organizations.
- Please retain a copy of your Online Business License Application or email from staff with the account number to upload to the registration portal.
- You will receive your business account number to use during registration once a member of the Business License Unit has determined you have provided the required documents.
If you already have a business registration for a separate type of business you operate in Milpitas, then add a "new business location" for Accommodations at the physical address of the residential unit. You can still add a second location even if it is the same location as your current business location.
Note: This step will be finalized after you register and are approved to operate an STR.
Before You Begin
Regardless of the amount, earning income from a short-term residential rental is considered a business. Therefore, you are required to obtain a Business License Number, also known as a Business Account Number.
Register your hosting business with the Business License Center before registering with the Planning Department. You will need to retain a copy of your Business License Online Application.
Click on the "Online Registration" button to begin the registration process. You will be taken to our registration portal and, from there, will click on "Application to Register an STR." The registration approval timing will depend on the accuracy and validity of the materials submitted and any follow-up.
- Staff can arrange for assistance in different languages if needed. Don't hesitate to email the Short Term Rental Support for assistance.
- You will not be able to save your place should you close your browser or navigate away to another page while working through the registration pages.
- The application/registration fee ($520) shall be paid before the City reviews your application. The payment of this fee does not guarantee approval of your application. Application fees are not refundable once the application has been submitted.
- The permit is valid annually on a rolling basis, expiring each year on December 31.
- This program is funded primarily by application fees and enforcement penalties and does not include funding from hotel taxes (also known as transient occupancy taxes)
- Hosting short-term rentals without registration numbers from the Business License Center and the Planning Department can result in significant fines and penalties.
You can access the Registration Portal for STR here.
As a registered host, there are steps and procedures to follow in order to meet compliance, which includes submitting monthly TOT payments and reports
Anyone in Milpitas who receives rent for a stay of fewer than 31 days must collect a 14% tax on the amount that they earn from their guests. This is called the "Transient Occupancy Tax (TOT)".
For hosts that use a platform other than or in addition to Airbnb, please refer to our FAQ section to learn more about calculating TOT and view this TOT Step-by-Step Guide (PDF).
Note: Currently, the only hosting platform that we have a collection agreement with is Airbnb. If you ONLY list your residence on Airbnb you do not need to collect TOT unless you have opted for this in your agreement with Airbnb. Regardless if you list your residence on Airbnb or other hosting platforms, you must still follow the guidelines above to fulfill your reporting obligations on earnings.
Here you can access the TOT Payment Portal for STR.
Remain the permanent resident at the dwelling where you host short-term rentals. If you sell your dwelling unit, the permit can not be transferred to the new owner or a different dwelling unit. Only one Permanent Resident may be associated with a Residential Unit on the Registry, and it shall be unlawful for any other person, even if that person meets the qualifications of a "Permanent Resident," to offer a Residential Unit for Short-Term Residential Rental.
- Pay your hotel taxes: Transient occupancy taxes ("hotel taxes") apply to short-term rentals. If the hosting platform you are using does not automatically remit taxes to the Finance Department, you will need to ensure that taxes are remitted. Please be aware that additional State and;
- Federal income taxes may also apply.
- Renew your business license annually with the Business License Center, Renewals are due every January 1 and can be submitted online.
- Renew your registration with Planning Department every year.
- Ensure your property remains free of violations of Building, Housing, Planning, and all other City codes.
- No exterior signage is allowed as short-term rentals are intended to remain incident to the residential nature of the dwelling unit. In addition, a permit can be revoked due to ongoing noise/event/party complaints.
- Fines and penalties for illegal short-term rental hosting.
- Remove all (online) listings that advertise your short-term rental, and cancel pending short-term rental reservations for stays of less than 30 days.
- Hosts will also have to close their (separate) business license, by contacting the Business License Center to declare that they are no longer hosting.
- Email Short Term Rentals with the following information:
- Your STR permit number
- Your street address
- Your full name
- A statement that you no longer intend to host short-term rentals
- What is a short-term rental?
- What is a "host"?
- How do I register with the City of Milpitas as a business and a short term rental?
- Did the primary law on short-term rentals change?
- What are the rules for Live / Work Units?
- What properties are ineligible for short-term rentals?
- Are there any fees associated with operating a short-term rental?
- What are the laws regarding other types of rentals?
- What is "Occupancy Tax"?
- What is the TOT rate?
- Do I need to submit a monthly report even though Airbnb collects and remits TOT on my behalf?
- What does 'taxable receipts' include?
- What information do I need to provide for the monthly report?
- When and how do I remit TOT and my monthly reports?
- Can I remit the TOT payment in person, or can I mail it and pay via check?
- I did not conduct any rentals during the reporting month. Do I still need to complete a monthly report?