Thinking about buying a place in Milpitas to run as an Airbnb or short-term rental? Before you make a move, you need to know how the City regulates STRs and how taxes work. Milpitas has a clear framework that protects neighborhoods and affects your returns. In this guide, you will learn what is allowed, what it costs, and the steps to stay compliant. Let’s dive in.
Hosted only: what Milpitas allows
Milpitas permits only hosted short-term rentals, which means you must live in the unit you list. Unhosted or absentee rentals are not allowed. New residents must live in the home for at least 60 consecutive days before applying. You can review the full rules on the City’s short-term rental page.
Eligible and ineligible units
Single-family homes and individual units in multi-family buildings can qualify if the host lives in that unit. ADUs and junior ADUs are not eligible under the program. The City also excludes certain categories such as below-market-rate or public housing units. Details are on the Milpitas STR page.
Permits, registration, and timing
You register the activity as a business, apply for the STR permit, and renew annually. STR permits are annual and expire on December 31. Renewals align with the City’s business license cycle. For background on the City’s adoption of the program, see the Council record.
Required documents
At application, the City lists these items:
- Two proofs of primary residence, such as a driver’s license or voter registration.
- Site and floor plan that shows parking and bedrooms.
- Signed Good Neighbor Manual.
- Smoke and carbon monoxide alarm self-certification.
- Copy of your business license application.
- Proof of liability insurance with at least 500,000 dollars coverage, or platform-provided coverage documentation. You will also pay application and license fees. Because fees change, check the City’s fees and payment page and the STR page for current amounts and instructions.
Taxes: 14 percent TOT, filed monthly
Milpitas imposes a Transient Occupancy Tax of 14 percent on stays of 30 nights or fewer. You must file returns and remit payments monthly. Returns for a given month are due by the last day of the following month, and you must submit a return even if you had no bookings. See filing steps on the City’s Transient Occupancy Tax page.
Platform collection and your reporting
The City notes that Airbnb currently has a collection agreement for Milpitas. If your booking occurs on Airbnb, the platform may collect and remit TOT on that stay. You are still responsible for keeping records and meeting any required monthly reporting. If you use multiple platforms or direct bookings, make sure TOT is collected and remitted properly. You can verify platform coverage on Airbnb’s tax collection help page and the City’s STR page.
City vs county TOT
Milpitas is an incorporated city with its own TOT. Santa Clara County collects TOT only in unincorporated areas. If your property is inside Milpitas city limits, you work with the City. For county rules in unincorporated areas, see the County’s TOT guidance.
Operating rules that matter
To protect neighbors and guests, the City sets clear operating standards. Key items include:
- Maximum occupancy equals 2 persons per bedroom plus 1 additional person.
- A host or a designated local contact must be reachable 24, 7 and able to respond within one hour to complaints.
- Post guest-facing information inside the unit. This includes occupancy limits, parking rules, trash and recycling, emergency contacts, and an evacuation plan.
- Every listing or advertisement must display the City-issued STR registration number. You will find the full list of operating rules on the Milpitas STR page.
Penalties for noncompliance
Milpitas takes enforcement seriously. The City states that violations can trigger penalties of at least 1,000 dollars per day for each unlawful unit, starting when a Notice of Violation is issued, with potential referral to the City Attorney for repeat cases. Review enforcement language on the STR page before you list.
State laws that affect listings
Two statewide consumer laws apply to California short-term rentals:
- AB 537 requires platforms and hosts to show the total price, including mandatory fees, at the point of offer. See the bill summary for AB 537.
- SB 644 sets 24-hour cancellation without penalty in defined situations and requires timely refunds. Review the statute text for SB 644. Make sure your listing, pricing, and cancellation policies match these rules.
What this means for investors
Because unhosted STRs are prohibited, the classic absentee-investor model is not viable inside Milpitas. If you want STR income here, you must live in the unit you host. This shifts the strategy from full-time STR investment to supplemental income for resident owners or tenants who qualify under the City’s primary residence rules.
Model your numbers conservatively
Account for permit and business license fees, liability insurance, platform fees, cleaning, time to host or the cost of a local contact, and monthly tax filings. Include the impact of the 14 percent TOT on guest pricing. If you rely on platform tax collection, confirm it covers your bookings and keep your monthly reporting consistent. For state and federal income tax treatment, consider speaking with a CPA.
Quick purchase checklist for Milpitas STRs
Use this short list before writing an offer:
- Confirm the home is a legal dwelling and not an ADU or JADU.
- Can you establish primary residence and meet the hosted requirement, including the 60-day occupancy before applying if you are new to the home.
- Review HOA CC&Rs or lease terms for STR allowances.
- Budget for permits, business license, insurance minimums, compliance time, and potential penalties if rules are missed.
- Plan your 24, 7 local contact coverage and a one-hour response time.
Regional context
Bay Area cities vary in approach. Some nearby cities allow unhosted rentals with annual night caps. For example, Mountain View distinguishes hosted and unhosted categories and uses day limits, outlined on the Mountain View STR page. By contrast, Milpitas sits on the stricter end with hosted-only rules and an ADU ban.
Bottom line
If you plan to host in Milpitas, align your strategy with the City’s hosted-only model, get your permits in order, and build a clean tax and compliance routine. Done right, STR income can supplement your housing costs while keeping you on the right side of City rules. If you are evaluating a purchase with hosting in mind, we can help you model scenarios and understand the tradeoffs.
Ready to plan your Milpitas purchase or hosted STR? Reach out to Jill Chen & Oliver Huang for bilingual, data-driven guidance tailored to Silicon Valley neighborhoods.
FAQs
Can I run an unhosted Airbnb in Milpitas?
- No. Milpitas allows only hosted rentals where you live in the unit you list, and unhosted or absentee rentals are prohibited per the City’s STR program.
Are ADUs allowed as STRs in Milpitas?
- No. Accessory dwelling units and junior ADUs are explicitly not eligible for STR use under the City’s rules.
How does Milpitas TOT work for STR hosts?
- The City levies a 14 percent Transient Occupancy Tax on stays of 30 nights or fewer, and hosts file monthly returns that are due by the last day of the following month.
What penalties apply to illegal STRs in Milpitas?
- The City states violations can result in penalties of at least 1,000 dollars per day for each unlawful unit beginning when a Notice of Violation is issued.
Which platforms collect Milpitas TOT today?
- The City notes Airbnb currently has a collection agreement, but you should confirm coverage and still meet your monthly reporting obligations.
Do county TOT rules apply inside Milpitas city limits?
- No. Milpitas is an incorporated city with its own TOT, while Santa Clara County collects TOT only in unincorporated areas.
