Overview: Are Short‑Term Rentals Allowed in Los Gatos, CA?

Yes. Short‑term rentals are permitted in Los Gatos under a regulated framework adopted in 2019. Prior to February 19, 2019, Los Gatos’ zoning code did not recognize short‑term rentals as an allowed use, effectively prohibiting them. The Town Council subsequently approved an ordinance allowing regulated short‑term rentals, which became effective March 21, 2019. The Town operates a cap on total licenses equal to five percent of the housing stock, maintains strict limits on annual operating days depending on hosting status, and requires hosts to meet specific primary‑residence, occupancy, parking, and compliance standards. See Los Gatos Municipal Code Article XIV for the operative rules.[^5]

How to Start a Short‑Term Rental Business in Los Gatos

The licensing and tax process is multi‑step and requires both planning and finance clearances. A typical sequence is:

1. Pre‑application verification

   • Confirm the unit is your primary residence (must reside at least nine months per year).[^1]
   • Ensure the unit qualifies (e.g., ADUs permitted only if approved prior to February 6, 2018).[^1]
   • Check HOA rules and obtain approval if applicable.[^1]
   • Confirm building habitability; obtain or retrieve a Certificate of Occupancy or complete a health/safety inspection if needed.[^9]

2. Applications and routing

   • Submit the Business License/TOT Registration through the Town’s HdL Business License Portal.[^3]
   • Submit the Short‑Term Rental Application (with submittal requirements) to the Planning Division for review.[^2]

3. Review, fees, and issuance

   • Planning reviews the STR application; Finance reviews the business license/TOT registration.
   • Upon approval, fees are collected and the Business License with Short‑Term Rental License Number is issued.

4. Operating setup

   • Provide guests with the Town’s Noise Ordinance, Smoking Ordinance, Short‑Term Rental Ordinance (highlighting parking/occupancy), and the local trash schedule.[^16][^17][^5]
   • Designate a local representative able to respond to issues within 60 minutes and be on call 24/7.[^12]

5. Taxes and recordkeeping

   • Collect the 10% Transient Occupancy Tax (TOT) and remit quarterly using the Town’s TOT Remittance form, even if you use a platform that collects TOT on your behalf.[^4][^6]
   • Retain compliance records for three years.[^1]

6. Annual renewal and ongoing compliance

   • Renew your Business License with STR License Number before the end of each calendar year.[^3]
   • Operate within the annual day caps (hosted 180 days; un‑hosted 30 days) and maintain the occupancy and parking limits.[^1][^7]

If you list on Airbnb, note that the Town has a voluntary collection agreement only with Airbnb; hosts must still file quarterly TOT forms. Other platforms do not collect TOT for Los Gatos; hosts are responsible for tax collection and remittance.[^6]

Required Documents, Permits, Licenses, and Guidelines

• Business License/TOT Registration (submitted via HdL Business License Portal).[^3]
• Short‑Term Rental Application submitted to Planning (includes all submittal requirements).[^2]
• Certificate of Occupancy or health/safety inspection if CO cannot be produced (contact Building Department).[^9]
• Proof of primary residence (two or more of the following: DMV registration, driver’s license, voter registration, tax document listing residence, utility/cellular bill within 60 days).[^1]
• HOA approval letter if the property is in an HOA.[^1]
• Local 24/7 representative information and contact details.[^12]
• Guest disclosures: Noise Ordinance, Smoking Ordinance, Short‑Term Rental Ordinance (with highlighted parking/occupancy), and local trash schedule.[^16][^17][^5]
• TOT Remittance filed quarterly (with payment if applicable).[^4]
• Business License annual renewal at end of each calendar year.[^3]
• Record retention for three years (including TOT payment documentation).[^1]

Specific Regulations for Short‑Term Rentals in Los Gatos

• License cap: Licenses are capped at five percent of the Town’s overall housing stock. Once the threshold is reached, a first‑come, first‑served waiting list is established.[^1]
• Primary residence: The STR must be the host’s permanent residence. The host must reside at the property for at least nine months per year and document it via standard proofs.[^1]
• Annual day caps:
  • Hosted (host present): 180 days per calendar year.
  • Un‑hosted (host not present): 30 days per calendar year.
  • An owner may hold both hosted and un‑hosted licenses for the same property but cannot rent them concurrently.[^1]
• Property limits: One STR per parcel and one per owner; however, a single property may offer separate STR options (e.g., a room and a pre‑2/6/2018 ADU) provided they are not rented simultaneously.[^1]
• ADU restrictions: New ADUs approved after February 6, 2018 cannot be rented for fewer than 30 days.[^1]
• Occupancy limits: Maximum overnight occupants is two persons (aged 18+) per bedroom plus one additional person per unit; maximum daytime (non‑overnight) occupants is 1.5 times the overnight maximum. The Town has discretion to set final occupancy limits.[^7]
• Management: A local representative must be available 24/7, able to respond to complaints and be physically present within 60 minutes. “Local” is defined as within a 30‑minute travel time of the STR.[^12]
• Parking: Guests must park on‑site where on‑street parking is not permitted. Where on‑street parking is allowed, STR guests may use only two guest parking passes per house/property purchased through the Police Department.[^1]
• Taxes: TOT is 10% of rent and must be collected and remitted to the Town. Airbnb collects TOT under a voluntary collection agreement; all hosts must file quarterly TOT Remittance forms (including “no rent” quarters), and hosts must keep TOT payment records for three years.[^6][^4][^1]
• Prohibited uses: STRs may not be used for commercial or assembly events (e.g., weddings).[^1]
• Location restrictions: STRs are not permitted in apartment buildings to conserve long‑term housing stock.[^1]
• License revocation: The Community Development Director may revoke a license, and licenses are automatically revoked after three confirmed violations within 12 months. Revocations remain in effect for five years. Appeals are available per the ordinance. Unlicensed operation triggers fines and may result in denial or revocation of future licenses.[^1][^5]

County‑ and State‑Level Context: Santa Clara County does not appear to impose separate, county‑wide STR regulations that differ from Los Gatos’ local rules. State‑wide, California subjects STR operators to the CaliforniaTransient Occupancy Tax rules (Revenue and Taxation Code §7280 et seq.) as implemented locally; hosts must register, collect, and remit TOT per local ordinance. Los Gatos’ TOT framework is codified in Chapter 25, Article III of the Municipal Code.[^6]

Contact Information (Local Authority in Charge of STRs)

• Planning (licensing/ordinance questions)
  • Phone: (408) 354‑6872
  • Email: planning@losgatosca.gov[^1]
• Finance (business license/TOT)
  • Phone: (408) 354‑6835
  • Email: businesslicense@losgatosca.gov[^1]
• Code Compliance (complaints/enforcement)
  • Phone: (408) 399‑5720
  • Email: codecompliance@losgatosca.gov[^1]
• Building Department (Certificate of Occupancy/habitability)
  • Phone: (408) 354‑6876
  • Email: Building@losgatosca.gov[^9]

Source Pages

• Los Gatos Short‑Term Rentals program overview (background, process, FAQs, contacts): www.losgatosca.gov/2541/Short-Term-Rentals
• Short‑Term Rental Application (Planning Division submittals): www.losgatosca.gov/DocumentCenter/View/23054/Short-Term-Rental-Application-PDF
• Business License/TOT Registration (HdL portal entry point and form): losgatos.hdlgov.com/ and www.losgatosca.gov/DocumentCenter/View/37918/2024-Updated-BUSHOTEL-STRBLPFEE
• TOT Remittance Form and instructions (quarterly filing): www.losgatosca.gov/DocumentCenter/View/23055/TOT-Remittance-Form
• Municipal Code: Short‑Term Rental Ordinance (Article XIV): library.municode.com/ca/los_gatos/codes/code_of_ordinances?nodeId=CO_CH14LIMIBURE_ARTXIVSHRMRE
• Municipal Code: Transient Occupancy Tax (Chapter 25, Article III): library.municode.com/ca/los_gatos/codes/code_of_ordinances?nodeId=CO_CH25TA_ARTIIITROCTA
• Noise Ordinance (Municode link provided by Town): library.municode.com/ca/los_gatos/codes/code_of_ordinances?nodeId=CO_CH16NO
• Smoking Ordinance (Municode link provided by Town): library.municode.com/ca/los_gatos/codes/code_of_ordinances?nodeId=CO_CH18OFMIPR_ARTVISMRE
• Online complaint tracker (Code Compliance): ca-losgatos2.civicplus.com/requesttracker.aspx

References: [^1] www.losgatosca.gov/2541/Short-Term-Rentals; [^2] www.losgatosca.gov/DocumentCenter/View/23054/Short-Term-Rental-Application-PDF; [^3] losgatos.hdlgov.com/ and www.losgatosca.gov/DocumentCenter/View/37918/2024-Updated-BUSHOTEL-STRBLPFEE; [^4] www.losgatosca.gov/DocumentCenter/View/23055/TOT-Remittance-Form; [^5] library.municode.com/ca/los_gatos/codes/code_of_ordinances?nodeId=CO_CH14LIMIBURE_ARTXIVSHRMRE; [^6] library.municode.com/ca/los_gatos/codes/code_of_ordinances?nodeId=CO_CH25TA_ARTIIITROCTA; [^7] www.losgatosca.gov/Faq.aspx?QID=424; [^9] www.losgatosca.gov/Faq.aspx?QID=408; [^12] www.losgatosca.gov/Faq.aspx?QID=425; [^16] library.municode.com/ca/los_gatos/codes/code_of_ordinances?nodeId=CO_CH16NO; [^17] library.municode.com/ca/los_gatos/codes/code_of_ordinances?nodeId=CO_CH18OFMIPR_ARTVISMRE; [^18] ca-losgatos2.civicplus.com/requesttracker.aspx.