Short‑Term Rentals in RWC: Rules, Taxes & Pitfalls

Thinking about listing your Redwood City home for a few weekends to earn extra income? The rules here are specific, and small missteps can lead to fines or unexpected taxes. You want clarity on what is allowed, what it costs, and how to stay compliant. This guide breaks it all down so you can host with confidence and protect your investment. Let’s dive in.

What Redwood City allows

Redwood City defines a short-term rental as a stay of fewer than 30 consecutive nights. Stays of 30 nights or more are not treated as short-term rentals and are not subject to the city’s transient occupancy tax. You can review the program details on the city’s official short-term rental page for full context and forms (City of Redwood City short-term rentals).

Primary residence and day limits

Only your primary residence may be used as a short-term rental, and you can only have one primary residence at a time. If guests stay while you are not present, those unhosted nights are capped at 120 days per calendar year. There is no numerical limit for hosted stays when you are present during the booking. See the city’s short-term rental page for the full set of standards and definitions (Redwood City STR program).

ADUs and second homes

Accessory dwelling units are generally not permitted for short-term rentals unless they were registered with the City before January 1, 2020. Newer ADUs cannot be used exclusively for short stays. Second homes and investment properties are not eligible because of the primary residence rule. For ADU specifics, review the city’s ADU guidance (Redwood City ADU ordinance).

Taxes you must plan for

Redwood City charges a 12% transient occupancy tax (TOT) on rent collected for stays of 30 nights or less. The City provides a return and remittance system and directs TOT revenue to its Affordable Housing Fund for local housing programs. Start with the city’s TOT page for rates, forms, and contacts (Redwood City TOT).

Short-term rental platforms sometimes collect local lodging taxes for you. Airbnb lists Redwood City’s TOT among the taxes it may collect on bookings, but platform coverage can change. Confirm whether your platform remits Redwood City TOT on your behalf or if you must file returns directly (Airbnb tax collection overview).

For federal income taxes, the IRS has a simple exception. If you rent your home fewer than 15 days in the year and you also use it as a home, you generally do not report that rental income and cannot deduct rental expenses. If you hit 15 days or more, rental income must be reported and expenses are allocated based on use. Review IRS Publication 527 for the rules on vacation homes and reporting methods (IRS Publication 527).

Permits and operating standards

Step-by-step to start hosting

1. Confirm eligibility. Make sure the property is your primary residence and not a prohibited ADU. If in doubt, start with the City’s STR page and ADU guidance (STR program, ADU ordinance).

2. Register for TOT. Set up your TOT account and understand filing deadlines, even if you expect a platform to collect tax (Redwood City TOT).

3. Apply with the City’s STR system. Complete registration and follow any posting, recordkeeping, and local contact requirements (Redwood City STR program).

4. Prepare operations. Provide existing on-site parking to guests, designate a local contact when you are away, prohibit special events, and verify building, fire, and safety compliance (see the STR standards on the City site).

5. Track your unhosted nights. Use a shared calendar to stay under the 120-day cap and keep records of each stay.

Common pitfalls and how to avoid them

• Misclassifying the property. Listing a second home or an ineligible ADU is a frequent violation. Verify primary residence status and ADU restrictions on the City’s pages.
• Failing to collect or remit TOT. Do not assume a platform is filing correctly for you. Confirm coverage and keep copies of returns and payments (Redwood City TOT).
• Misunderstanding the IRS less-than-15-day rule. Track personal and rental days carefully so you know if income must be reported and how to allocate expenses (IRS Publication 527).
• Overlooking HOA, lease, mortgage, or insurance limits. Many agreements restrict short stays, and standard insurance may not cover STR activity. Review rules and coverage before you list (Airbnb local rules overview).
• Neighbor impacts that trigger enforcement. Noise, parking, or nuisance complaints can lead to fines. Create a clear house manual, post quiet hours, and set up rapid response through your local contact (see the City’s STR operating standards).

Quick compliance checklist

• Confirm primary residence status and ADU eligibility with City resources.
• Register for a TOT account and understand filing schedules.
• Complete the City’s STR registration and keep records of approvals.
• Set up parking, safety checks, a house manual, and a designated local contact.
• Track every booking day and all gross receipts and expenses.
• Review HOA, lease, mortgage, and insurance requirements in writing.

Is a short-term rental right for your property?

Short-term rentals can offset carrying costs, but only if you operate within the rules and price in taxes, cleaning, and wear-and-tear. If you prefer a hands-off approach, a professional team can coordinate compliance, guest experience, and ongoing operations. With engineering-informed diligence and boutique service, you can make a clear go or no-go decision and operate smoothly if you proceed.

If you want an expert second opinion or help setting up compliant hosting in Redwood City, reach out to the local team at Luxuriant Realty. We can advise on neighborhood considerations, prepare your home for guests, and manage ongoing operations so you stay focused on your goals.

FAQs

What is a short-term rental in Redwood City?

• It is a stay of fewer than 30 consecutive nights; 30 nights or more is not considered a short-term rental under the City’s program.

Are unhosted nights limited in Redwood City?

• Yes, unhosted stays in your primary residence are capped at 120 days per calendar year, while hosted stays have no numerical cap.

Can I use my ADU for short-term rentals in Redwood City?

• Generally no, unless the ADU was registered with the City before January 1, 2020; newer ADUs cannot be used exclusively for short stays.

How does Redwood City’s 12% transient occupancy tax work?

• The City imposes a 12% TOT on rent for stays of 30 nights or less; hosts must ensure it is collected and remitted through a platform or directly with the City.

Do I need a city permit to host a short-term rental?

• Yes, hosts must register with the City’s short-term rental program and comply with operating standards, including a local contact and parking rules.

What is the IRS less-than-15-day rule for hosting?

• If you rent your home fewer than 15 days in the year and also use it as a home, you generally do not report the rental income and cannot deduct rental expenses.

Do platforms like Airbnb collect taxes for Redwood City stays?

• Sometimes; Airbnb lists Redwood City TOT among taxes it may collect, but coverage can change, so you should confirm and keep your own records.