Short-Term Rentals in Cupertino

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Background

Short-term rentals (STRs), made popular by websites like Airbnb and Homeaway, allow operators to rent out a room or an entire residence to a guest (“transient”) for a period of less than 30 days. Many visitors prefer renting local homes because they are less expensive than hotels. These rentals also provide opportunities for homeowners to generate income.

Based on reports on STR platforms, there are roughly 300 STRs available within City limits. Current requirements for STRs are focused on zoning and finance requirements described further in the "Current Requirements for STRs" section below.  

Proposed STR Regulatory Program

The City is considering implementing a regulatory program for STRs and held a study session on potential short-term rental regulations at the Planning Commission meeting on July 24, 2018. The staff report can be found here. City staff will be drafting a regulatory program for the Planning Commission to consider in Fall 2018. 

Give Your Input

The City welcomes your input on potential STR regulatory measures and invites you to take this survey on short-term rental regulations: www.cupertino.org/opencityhall or www.opentownhall.com/6590.  The results of this survey will be considered when developing the proposed regulations..

Current Requirements for STRs

The City’s municipal code allows for limited home occupations (Chapter 19.120 – Home Occupations), such as operating an STR, as long as the home occupation is considered to be an incidental and secondary to the use of a residence for dwelling purposes and does not change the character of the neighborhood. The City’s municipal code also outlines that guests or “transients” occupying these STRs are subject to a 12% Transient Occupancy Tax (TOT) on the rent charged during the first 30 days of occupancy (Chapter 3.12 – Transient Occupancy Tax). STR operators are required to register and obtain a Business License Certification from the City as well as collect TOT from renters.

Therefore, those who are interested in running an STR business in Cupertino must comply with the following:

  1. The property owner or property leaseholder must be the primary resident at the property and be on-site during the lease period.
  2. The number of transient guests must be limited to two (2) or fewer.
  3. All transient rentals must be an incidental use.
  4. All building alterations must comply with R1 regulations and building code requirements including occupancy regulations.
  5. The property owner, main property leaseholder, or person otherwise conducting any short-term rentals (the operator), must submit a Business License Application and obtain Certification prior to the commencement of any short-term rental leases. Operators must also collect TOT (12% of rent charged) from guests and remit the tax to the City unless the rentals were booked through Airbnb, in which case Airbnb will collect and remit the tax to the City.

Business License Requirement

All STR operators must obtain a Business License Certification in order to operate.  The operator can apply online or download the application for submission to the Department of Administrative Services (10300 Torre Ave, Cupertino, CA 95014) in person or by mail:

ATTN: Dept. of Administrative Services
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014

The application process includes an STR Acknowledgement Form  that is required for approval.  For any questions regarding the business license application process, please contact the Department of Administrative Services by calling (408) 777-3220.

Transient Occupancy Tax (TOT) Requirement

STR operators must collect TOT (12% of rent charged) from guests and remit the tax to the City, unless the rentals were booked through Airbnb. For STR bookings completed through Airbnb, Airbnb will collect and remit TOT on the operator’s behalf beginning August 2018.

STR operators that do not use Airbnb can complete the transient occupancy tax remittance form and mail it with payment to:

ATTN: Dept. of Administrative Services
City of Cupertino
10300 Torre Avenue
Cupertino, CA 95014

For any questions regarding the TOT remittance process, please contact the Department of Administrative Services by calling (408) 777-3220.

Additional Resources

Online Business License Application

Downloadable Business License Application

Transient Occupancy Tax Remittance Form

Short-Term Rental Acknowledgement Form