South Lake Tahoe updates short-term rental regulations

Short-term rental (STR) operators in South Lake Tahoe, California, will have new rules to follow after the City Council approved a new STR ordinance June 17, 2025. The previous law, Measure T, was overturned by the El Dorado County Superior Court in March 2025. The city declined to appeal the ruling and passed a moratorium on issuing STR permits while it worked on getting new regulations in place.

Measure T, approved by voters in 2018, phased out existing STRs in prohibited areas over a period of three years. The ordinance applied to properties rented for 30 days or fewer outside the city’s tourist core and required operators in those areas to cease offering short-term rentals after December 31, 2021. An exception allowed permanent residents to rent their properties on a short-term basis for up to 30 days a year.

In 2021, the South Lake Tahoe Property Owners Group filed a lawsuit against the measure, arguing that it discriminated against property owners who are not full-time residents. The measure was upheld by an appeals court in 2023. However, the latest ruling from the El Dorado County Superior Court struck down the entire ordinance, stating that the permanent resident exception was unconstitutional and discriminatory.

Under the new law, which goes into effect July 17, rules for STRs in all areas include the following:

• Operators are required to obtain a Vacation Home Rental (VHR) permit.
• The number of guests allowed is limited according to the number of paved parking spaces and number of bedrooms on the property.
• Commercial activities such as weddings and large parties are prohibited.
• The STR permit number must be included in all listings and advertisements.
• Operators must designate a property manager.
• Guests must follow noise, garbage, and parking rules.
• STR operators with three violations within a 24-month period can permanently lose their VHR permit.

In residential neighborhoods outside the tourist core, the following rules also apply:

• STRs are not allowed in multifamily properties, including attached condominiums, unless the condominium had a VHR permit as of September 1, 2016.
• Guests must check in face-to-face either in person or virtually and sign a Good Neighbor Contract.
• Operators are required to install indoor noise and outdoor video monitoring devices.
• Property managers must be available to respond in person to complaints within 60 minutes, 24 hours a day, seven days a week.

For now, the city is going to issue a maximum of 150 permits per month. The city is prioritizing applications from previous VHR permittees in good standing whose permits expired in 2021 and were not renewed because of Measure T or whose permits became void in April 2025 because of the court’s ruling on Measure T. The city plans to gather data during this application period and could amend the STR regulations in September. Applicants who don’t fit these criteria may submit applications starting August 23, 2025.

South Lake Tahoe STR operators are required to collect city transient occupancy tax from their guests and pass those tax revenues on to the city. Although Airbnb and Vrbo collect lodging taxes on behalf of their hosts in some California cities, they don’t do so in South Lake Tahoe. That means STR operators are responsible for registering, collecting taxes from their guests, filing tax returns, and remitting taxes to the city. The City Manager has the power to revoke VHR licenses for operators who don’t stay current on transient occupancy taxes.

Avalara MyLodgeTax can help automate and simplify tax compliance for STR operators. For more on lodging taxes in California, see our state vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.