Shawn Lavi, CPA, is the principal and the author of this page. Elias Lavi is co-owner and founder.
Santa Monica writes its own rules for landlords, home-sharing, and property sales. Almost every one of them shows up on a tax return or a closing statement. We keep Santa Monica owners current on the city filings and plan for the costs before they come due.
LaviCPA is Shawn Lavi, CPA and Elias Lavi, CPA. Our only office is at 7707 Sunset Blvd in Los Angeles. Santa Monica clients meet us there or on Zoom.
A business license for every rental property
The city treats renting out a house, condo, ADU, or apartment building as a business. It wants a separate business license for each property you own, whatever the unit count.
Rental property sits in Tax Rate Group I. The tax is $75 on the first $60,000 of gross receipts, plus $1.25 per $1,000 above that. A business with less than $103,000 in worldwide gross receipts can apply for an exemption from the tax. It still needs the license, and a late renewal loses the exemption.
We tie the gross receipts on your license renewal to the rent on your Schedule E, so the two numbers agree.
The rent control registration fee
Each controlled unit owes the Rent Control Board an annual registration fee. For fiscal 2026/2027 it is $240 per unit. You can pass up to half of it to the tenant, which comes to $10 per unit per month with proper notice.
The share you pay is a rental expense. The share tenants pay you back is rental income. We record both.
Home-sharing and the 17% bed tax
Santa Monica allows home-sharing. That means renting one or more bedrooms in your primary residence for 30 days or less while you live on site for the whole stay. You need a Home-Share permit and a business license. Both run through June 30 and renew July 1.
Home-share stays owe a 17% transient occupancy tax. Hotels pay 15%. Since you live in the home, the federal rules for renting part of a residence apply, and they can cut what you deduct.
Selling in Santa Monica
Santa Monica adds a city transfer tax on top of the county's $1.10 per $1,000. The city charges $3 per $1,000 under $5 million and $6 per $1,000 from $5 million up to $8 million. At $8 million or more it charges $56 per $1,000, and that rate applies to the whole price.
If your sale could land near $8 million, we run the numbers before you list. See our 1031 exchange page if you plan to buy again.
Santa Monica FAQs
Do I need a Santa Monica business license to rent out one condo?
Yes. The city requires a separate business license for each rental property inside city limits, including a single condo or house you own.
How much is the Santa Monica rent control registration fee?
$240 per controlled unit for fiscal 2026/2027. Up to half, or $10 a month per unit, can pass through to the tenant with proper notice.
What is the transfer tax on an $8 million Santa Monica sale?
The city's own example shows $448,000 in city tax and $8,800 in county tax, for $456,800 in total.
Book a free 30-minute New Client Introduction
Bring your last return, your rent roll, and any city notices. We will tell you what we can take on.
Book a free 30-minute New Client Introduction
General information only, not advice for your situation. Rules and rates change, so we confirm them before you act.