AIRBNB & SHORT-TERM RENTAL RULES

Palm Springs

,
California

Can you run an Airbnb or do rental arbitrage here? What the city requires: permits, taxes, safety rules and enforcement.

Updated
Oct 6, 2026
||
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ARBITRAGE VERDICT

Red light: only an owner can hold a certificate, and neighborhoods are capped

Palm Springs issues a vacation rental certificate only to an owner of record, one certificate each, and a business entity doesn't count as an owner,[1] so a tenant can't hold one. The code bars new certificates, other than junior ones, in a neighborhood past a 20% cap, and new permittees get 26 contracts a year.[1] Running without a certificate is a $5,000 fine plus permanent ineligibility.[1]

Our verdict, based on the sources at the end of this guide.

AT A GLANCE
Non-owner-occupied
Allowed
Single-family homes only, held by the owner[1]
Who holds the permit
The owner
The owner of record, or up to four natural persons in an LLC or partnership, never a business entity[1]
City permit
$1,046 a year
New and annual registration fee from Dec 1, 2025, plus a $25 tax registration[2, 3]
Permit cap
20% per neighborhood
No new full certificates past the cap, and 26 contracts a year for new permittees[1]
Lodging taxes
11.5%
City transient occupancy tax on stays of 28 days or less[3]
Stays of 30+ days
No certificate
A vacation rental is a stay of 28 consecutive days or less[1]

Palm Springs issues vacation rental certificates only to owners of record, and a business entity doesn't count as an owner.[1] The city can't issue a new certificate, other than a junior one limited to six contracts a year, in a neighborhood past a 20% cap.[1] New permittees get no more than 26 contracts a year.[1] The registration fee is $1,046 a year,[2] the transient occupancy tax is 11.5%,[3] and running without a certificate costs $5,000 and permanent ineligibility.[1]

01

Key requirements

Owner only

Only the owner of record can hold a vacation rental registration certificate. The code counts a family trust, or a partnership or LLC made up solely of natural persons, up to four of them, as the owner, but not a business entity.[1] An owner can be issued and keep only one certificate at a time, and a financial interest includes any arrangement that gives you a share of the rental revenue.[1]

Single-family homes only

A vacation rental is a single-family dwelling, or part of one, rented for 28 consecutive days or less while the owner isn't present.[1] No one may offer an apartment for rent for 28 consecutive days or less.[1]

Neighborhood cap

The city can't issue a new vacation rental certificate, other than a junior certificate, in a neighborhood where the share of homes with certificates is over the 20% cap.[1] If the share falls below the cap, waiting applications are served first in time, first in right.[1] A junior certificate allows no more than six contracts a year.[1]

Application

Register before first use and every year after.[1] The application needs evidence of a valid transient occupancy registration certificate, proof of commercial short-term rental insurance, a completed building, fire and safety inspection and a local contact who can reach the home within 30 minutes.[1] You must also acknowledge that no CC&Rs or deed restrictions bar the use, and each applicant must pass a city test every year before a certificate is issued or renewed.[1]

Registration fee

The city lists $1,046 for a new or annual vacation rental registration and $523 for a junior one, effective Dec 1, 2025.[2]

Agents and sales

An owner can retain an agent under an exclusive listing arrangement, a written deal giving the agent the sole right to rent the home, or a representative to help with registration, management and tax collection.[1] When the property changes owners, the certificate expires, and the new owner must be issued one before using the home as a vacation rental.[1]

02

Operational and safety standards

Contract limits

New permittees can have no more than 26 contracts a calendar year, and existing permittees no more than 32 plus up to four contracts that fall entirely in the third quarter.[1] A contract counts any occupancy while the owner isn't present, even if no one pays.[1]

Occupancy and parking

Allow no more than two persons per bedroom and eight in total, plus up to two children age 12 or under.[1] Estate homes with five or more bedrooms can have up to 12 guests plus two children.[1] Overnight, allow no more than one guest vehicle per bedroom.[1]

Local contact

Name a local contact who is available 24 hours, answers complaints by phone within 15 minutes and responds in person within 30 minutes if the problem isn't fixed.[1]

Noise and trash

Sound can't be audible at the property line, and sound devices must be used inside a fully enclosed unit.[1] Keep trash in proper containers out of public view, except on collection days between 5 AM and 8 PM.[1]

Display and insurance

Show your registration certificate and the maximum number of guests inside the unit and on all advertising, and put your city account number on all web-based advertising.[1] Carry commercial insurance that covers short-term rental, at the minimum limits the city manager sets.[1]

03

Tax obligations

City tax rate

Palm Springs imposes a transient occupancy tax of 11.5% of the rent charged to hotel guests,[3] and a transient is anyone staying 28 consecutive calendar days or less.[3] The code leaves out a single-family home rented only occasionally from its definition of hotel.[3]

Registration

You need a valid transient occupancy registration certificate to apply for a vacation rental certificate.[1] The tax registration fee is $25, and the permit must be posted conspicuously.[3]

Collecting and paying

You collect the tax from each guest when you collect the rent, and you must show it separately from the rent.[3] It's due when you collect it and goes delinquent if the city hasn't received it by the last working day of the following month.[3] A late payment carries the greater of $50 or 10% of the tax, plus interest of 1% per month.[3]

Booking platforms

Platforms the code calls short-term rental facilitators must report the address of each rental to the city every month and show your city account number in every listing.[3] They can't complete a booking for a vacation rental that isn't on the city's registry.[3] The code's history note dates this section to Ordinance 2133, 7/8/2026.[3]

04

Enforcement

Citations

A first administrative citation is $500, and later ones are $1,000.[1] A third violation in any 12-month period means a two-year suspension of the certificate.[1]

No certificate

Operating without a certificate brings a $5,000 administrative fine and permanent ineligibility to operate a vacation rental.[1] Continued operation brings a $10,000 fine.[1]

Advertising and contracts

Advertising without the certificate, operating without a contract or a contract summary to the city, or paying the monthly tax late brings a $2,500 fine and a six-month suspension for a first offense.[1] A second offense is $5,000 and revocation.[1]

Tax and police orders

Failing to remit transient occupancy tax after written notice means a 12-month suspension.[1] Failing to follow police orders means revocation of the certificate.[1]

Audits and appeals

Owners and their agents must give enforcement officials access to the property and records during normal business hours.[1] A denied certificate can be appealed under Chapter 2.50.[1]

Bottom line for arbitrage

Not STR Friendly
|Our take

Skip Palm Springs for rental arbitrage. Only an owner can hold the certificate, and new ones are capped by neighborhood.

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        Sources

        The bracketed numbers in this guide point here. All sources checked
        Oct 6, 2026
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        Palm Springs Municipal Code, Chapter 5.25, Vacation Rentals | City of Palm Springs (eCode360) | https://ecode360.com/42991950 Vacation Rentals | City of Palm Springs | https://www.palmspringsca.gov/government/departments/special-program-compliance/vacation-rentals-1098 Palm Springs Municipal Code, Chapter 3.24, Transient Occupancy Tax | City of Palm Springs (eCode360) | https://ecode360.com/42990286 Licensee Alert: Short-Term Rentals | California Department of Real Estate | https://www.dre.ca.gov/files/pdf/adv/2015_2019/Advisory2016LicenseeAlert2016shorttermrentals.pdf
        Owners can rent the home while they're away[1] An owner can hire an agent under an exclusive listing arrangement[1] Stays of 29 days or more aren't vacation rentals[1] Platforms must show the city account number in every listing[3]
        A tenant can't hold the certificate, and a business entity doesn't count as an owner[1] No new full certificates in a neighborhood past the 20% cap[1] New permittees get 26 contracts a year[1] The certificate expires when the property changes owners[1]
        Don't lease a home to list it. Work only with an owner who holds the certificate or can get one.[1] The code lets an owner use an agent under an exclusive listing arrangement. Check how a revenue share fits the financial interest rule before you sign.[1] Ask whether the home's neighborhood is over the 20% cap and whether CC&Rs or the HOA allow vacation rentals.[1] Managing a rental for an owner for pay may need a California real estate broker license.[4]
        Oct 6, 2026
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