San Diego County Loses $10M a Year as STR Owners Skip Occupancy Taxes

San Diego County is hemorrhaging $10 million a year in uncollected transient occupancy taxes because hundreds of vacation-rental owners simply are not paying what they owe. That makes STR tax evasion the county's single-largest source of uncollected tax revenue, and county supervisors are now paying close attention. If you rent a property in unincorporated San Diego County and have not registered for a transient occupancy tax certificate, the window to get right before enforcement escalates is closing fast.

The Problem: A Self-Reported System With No Guardrails

Unlike the City of San Diego, which built a full licensing framework under its Short-Term Residential Occupancy Ordinance, unincorporated San Diego County has kept its rules minimal. The county does not require a dedicated STR permit or impose density caps. What it does require is straightforward: pay the transient occupancy tax and display a transient occupancy certificate. That's it.

The catch is that the system is almost entirely self-reported. There is no licensing database for the county to cross-reference against active listings, no platform mandate pushing operators to verify compliance before going live. The result is a gap that hundreds of hosts have quietly exploited, whether intentionally or not, and the cumulative cost has reached a figure that is now impossible for elected officials to ignore.

Hosts who have followed the rules are not hiding their frustration. Stephen Brooks, an Airbnb host who rents a property in Borrego Springs and is fully registered with the county, told the San Diego Union-Tribune he is fed up watching non-compliant operators undercut him while pocketing tax money they should be remitting.

What the City of San Diego Already Requires (And Enforces)

If your rental sits inside the City of San Diego's nine council districts rather than in unincorporated county land, the compliance bar is significantly higher and enforcement is already active. The city's STRO framework, which took effect May 1, 2023, requires every host to hold one of four license tiers before accepting a single booking.

• Tier 1 - Part-time, up to 20 nights per year, host need not be onsite
• Tier 2 - Home sharing with host onsite, host may be absent up to 90 days per year
• Tier 3 - Whole-home rental anywhere in the city except Mission Beach, capped at 1% of total housing units
• Tier 4 - Whole-home rental in Mission Beach, capped at 30% of that planning area

As of May 22, 2026, the city has issued 8,384 active STRO licenses: 140 Tier 1, 2,370 Tier 2, 4,777 Tier 3, and 1,097 Tier 4. License fees run from a few hundred dollars for Tier 1 and Tier 2 up to $1,129 (plus a $41 application fee) for Tier 3 and Tier 4. Licenses expire two years from issuance and are not transferable between owners or addresses.

The city also collects an 8% transient occupancy tax on gross rental revenue. Hosts must maintain an active TOT certificate and a paid Rental Unit Business Tax account. Operating without a license can trigger fines of up to $1,000 per violation, and the city has already removed non-compliant listings from platforms.

The Posting and Contact Rules That Trip Up Even Compliant Hosts

City of San Diego hosts face some of the most specific signage requirements in California. A notice must be posted on the exterior of the dwelling, visible from the sidewalk or public right-of-way, printed at 8.5 x 11 inches, in all caps, black, bold, 20-point font. It must include the TOT certificate number, the STRO license number, host or local contact information and phone number, and the City of San Diego Code Enforcement Division contact information. Inside the unit, human trafficking reporting guidance must be posted in a conspicuous location.

Hosts must also provide guests with a written Good Neighbor Policy and designate a local contact who can respond to complaints, in person or by phone, within 60 minutes and take action to resolve the issue. ADUs and JADUs are prohibited from use as short-term rentals, with a narrow exception for companion units permitted before October 15, 2017. RVs, campers, tents, sheds, and tree houses are also off-limits.

What Hosts Should Do Right Now

Whether your property is in unincorporated county territory or inside city limits, the direction of travel is the same: regulators are paying closer attention, compliant hosts are pushing for enforcement, and the self-reporting grace period that let non-payers slide is drawing to a close.

• If you operate in unincorporated San Diego County, register for a transient occupancy tax certificate immediately and begin remitting the tax on all rental income.
• If you operate inside the City of San Diego, confirm your STRO license tier is correct for your situation, verify your exterior signage meets the exact specifications, and make sure your local contact can hit the 60-minute response window.
• Tier 3 and Tier 4 hosts must rent their units for a minimum of 90 days per year to keep their licenses active and must submit quarterly utilization reports to the city.
• Check that your hosting platform is collecting and remitting TOT on your behalf. Platforms operating in San Diego are required to verify valid STRO licenses and provide monthly data to the city.

County supervisors are now scrutinizing the $10 million annual shortfall. That kind of political attention rarely fades quietly. Hosts who are not yet in compliance should treat this moment as the warning shot it is.

For the complete San Diego compliance guide including tax calculator, checklist, and daily monitoring, see San Diego, CA STR Regulations.