Short-Term Rental Investment Guide for Citrus Heights, CA

Overview

Yes, short-term rentals are allowed in Citrus Heights, CA, as of May 2022. However, they are subject to specific regulations, licensing requirements, and taxation obligations that investors must carefully consider before establishing operations in this market.

Starting a Short-Term Rental Business in Citrus Heights

Step-by-Step Process

1. Verify Property Eligibility

   • Confirm the property is zoned for residential short-term rental use
   • Review any applicable CC&Rs or HOA rules (city does not enforce these)
   • For Accessory Dwelling Units (ADUs): Only those legally constructed before January 1, 2020, may be used as short-term rentals

2. Obtain Required Business License

   • Apply through the city's Business License Portal prior to operation
   • License is valid for one year from issuance
   • Must be renewed annually with reminder notices sent 60 days before expiration

3. Establish Tax Collection and Remittance Systems

   • Implement systems to collect 12% Transient Occupancy Tax (TOT)
   • Set up monthly remittance procedures with the city's finance department

4. Comply with Occupancy and Safety Requirements

   • Ensure maximum occupancy compliance: 2 people per bedroom + 2 additional guests (10 PM - 7 AM)
   • Complete rental housing inspection if property is not your primary residence

Required Documents, Permits, and Licenses

Business License

• Cost: $101.76 for the first year (renewed annually)
• Application Method: Online through city licensing system
• Validity: One year from date of issuance
• Application Portal: Available through city website

Transient Occupancy Tax Registration

• Tax Rate: 12% on all short-term rentals
• Collection Requirement: Must collect from guests staying 30 consecutive days or less
• Remittance Frequency: Monthly filing required
• Filing Deadline: Payment due by last day of the month following the end of the previous month
• Filing Requirement: Must file even if no taxes are due

Additional Documentation

• ADU Rental Restriction Acknowledgment Form (if applicable)
• Rental Housing Inspection Program registration (for non-primary residences)

Specific Regulations for Short-Term Rentals

City of Citrus Heights Regulations

Occupancy Limits

• Maximum occupancy: 2 people per bedroom plus 2 additional guests
• Restricted Hours: Additional 2-guest limit applies between 10 PM and 7 AM
• This regulation applies regardless of property size or number of bedrooms

Licensing Requirements

• Mandatory Business License: Required for all short-term rental operations
• Effective Date: May 14, 2022
• Pre-Operation Requirement: License must be obtained before renting begins
• Annual Renewal: License expires one year from issuance date

Tax Obligations

• Transient Occupancy Tax: 12% of rental rates
• Collection Responsibility: Host/operator must collect tax from guests
• Remittance Deadline: Within 30 days following the end of each calendar quarter
• Monthly Filing Requirement: Must file monthly reports with the finance department
• Grace Period: Filing deadline is last day of the month following the previous month

ADU Restrictions

• Pre-2020 ADUs: May be used as short-term rentals if legally constructed
• Post-2020 ADUs: Prohibited from short-term rental use
• Minimum Rental Period: ADUs must be rented for at least 30 consecutive days
• Acknowledgment Required: Must sign ADU Rental Restriction Acknowledgment Form

Inspection Requirements

• Primary Residences: Exempt from Rental Housing Inspection Program
• Non-Primary Residences: Subject to annual inspection and fee requirements
• Inspection Purpose: Safety and code compliance verification

Sacramento County and California State Regulations

While the provided content focuses primarily on Citrus Heights city regulations, investors should be aware of potential county and state-level requirements that may apply to short-term rental operations. The content provided does not contain specific county or state STR regulations, so investors should verify compliance with these additional jurisdictions as needed.

Contact Information

Business License Division

• Phone: (916) 727-4907
• Email: str@citrusheights.net

Community Development Department

• Address: 6360 Fountain Square Drive, Citrus Heights, CA 95621
• Phone: (916) 727-4740
• Lobby Hours: 8:00 AM - 4:00 PM

Building Division (for ADU questions)

• Phone: (916) 727-4760

Rental Housing Inspection Program

• Phone: (916) 725-5520

General City Information

• Phone: (916) 725-2448
• TTY/DA: California Relay Service 7-1-1
• Fax: (916) 725-5799

Source References

1. Short-term Rental License - City of Citrus Heights

2. Short-term Rental License FAQ - City of Citrus Heights

3. ADU Development Standards - City of Citrus Heights

Important Considerations for Investors

Compliance Monitoring

• The city does not enforce CC&Rs or HOA regulations – investors must independently verify compliance
• Regular monitoring of regulatory changes is recommended as STR laws continue to evolve

Financial Planning

• Account for business license renewal costs in annual budgets
• Factor in 12% TOT when setting rental rates
• Consider inspection fees for non-primary residence properties

Market Positioning

• Maximum occupancy limits may influence pricing strategies and target market
• ADU restrictions limit expansion opportunities in areas with newer ADU development

This guide provides a comprehensive overview of the regulatory landscape for short-term rental investments in Citrus Heights, California. Investors should verify current requirements and seek professional advice for complex situations.