San Diego is considering a new voter-approved tax called the Empty Second Home and Vacation Rental Tax. If it advances from the City Council Rules Committee and is later approved by the full City Council, it could be placed on the June 2, 2026 primary election ballot.

This post breaks down the ballot measure language in plain English, what it would cost, who it applies to, and what you can do now.  Please note that this is our understanding of the ordinance and process as it stands today and this issue is fast moving so while we will try to keep this up to date, there may be some out of date items at times as we work to update information.  Also, none of this information in any way constitutes legal advice.

Quick summary

If adopted, the measure would impose an annual tax on two categories of residential properties in the City of San Diego:

1. “Empty Second Homes” (ESH): residential units that are not a primary residence and are vacant more than 182 days per year. 

2. “Vacation Homes”: residential units where the owner’s group holds a Tier 3 or Tier 4 short-term rental license (generally whole-home, year-round STR licensing categories). 

Proposed tax amounts

• July 1–Dec 31, 2026: $4,000 per ESH or vacation home.

  Ballot Measure Language – Empty…

  • Plus $2,000 if the property is under corporate ownership or is a repeat neighborhood code enforcement violator. 

• Starting Jan 1, 2027: $8,000 per year per ESH or vacation home. 

  • Plus $4,000 if corporate-owned or a repeat code enforcement violator. 

• Beginning in 2028, the tax is adjusted annually by CPI (San Diego–Carlsbad). 

When would it start?

• The tax would take effect July 1, 2026 (if approved by voters) and continue until repealed by voters. 

Who is likely impacted

A) Whole-home STR operators (Tier 3 / Tier 4 license holders)

If you operate a whole-home STR under a Tier 3 or Tier 4 license, the property is defined as a “vacation home” under the measure and would be taxed unless you qualify for an exemption or exclusion period. 

B) Second-home owners whose property is vacant > 182 days/year

If your property is not your primary residence and sits vacant more than half the year, it may be classified as an ESH. 

C) Owners using an LLC or other entity

The measure defines “corporate ownership” broadly as any scenario where any person in the owner’s group is not a natural person (e.g., LLC, partnership, corporation, REIT). That classification can trigger the additional charge. 

What happens next (City process + timeline)

Step 1: Rules Committee vote (this Wednesday)

Per current reporting, the proposal is back at City Council Rules Committee on Wednesday January 28th, 2026 at 9am and they will decide whether to move it forward for full Council consideration, with the stated goal of a June 2026 primary ballot.

Step 2: Full City Council vote (if it passes Rules)

If Rules advances it, the full City Council would vote on whether to place it on the ballot.

Step 3: If placed on the ballot, voters decide June 2, 2026

California’s statewide primary election is June 2, 2026.

Practical note: primary-ballot timelines compress quickly. If the policy language isn’t settled early, “June” becomes harder.

What vacation rental owners can do right now

1) Show up in person at Rules Committee

In-person attendance is the strongest signal at committee stage. If you can’t speak, showing up still matters.  The meeting is on January 28th, 2026 at 9am at the City Administration building on the 12th floor.  Prior to the Rules Committee meeting at 8am just outside of the City Administration Building, Civic Theater and Golden Hall, the San Diego Short Term Rental Alliance is holding a rally in opposition to the proposed tax which you are encouraged to join

2) Email the Rules Committee members (today/tomorrow)

Keep it short, calm, and process-focused:

Ask them not to advance the measure or to delay pending independent fiscal/enforcement analysis.

Emphasize revenue risk and volatility: the City depends on existing visitor-driven revenues, and deterrence taxes can shrink them.

Here are the email addresses of councilmembers on the Rules Committee:

Council President Joe LaCava

Phone: 619-236-6611

Email: joelacava@sandiego.gov

Council President Pro Tem Kent Lee

Phone: 619-236-6616

Email: KentLee@sandiego.gov

Councilmember Sean Elo Rivera

Phone: 619-236-6699

Email: SeanEloRivera@sandiego.gov

Councilmember Vivian Moreno

Phone: 619-236-6688

Email: VivianMoreno@sandiego.gov

Councilmember Raul Campillo

Phone: 619-236-6677

Email: RaulCampillo@sandiego.gov

3) Prepare a 30–60 second personal story (if speaking)

Focus on:

• Your compliance
• Your local economic impact (vendors, cleaners, maintenance, small businesses)
• How this will impact your guests

4) Get your owner/operator network mobilized

This measure is structured to move quickly. Encourage your peers to do the same two actions: show up and email.

FAQs for San Diego vacation rental owners

1) What exactly is being taxed?

An annual tax on (1) “empty second homes” and (2) “vacation homes” (Tier 3/Tier 4 STR licensed units). 

2) How does the measure define an “Empty Second Home”?

A residential unit that is not the owner’s primary residence and is vacant for more than 182 days in a calendar year. 

3) How does it define “Vacation Home”?

Any residential unit for which the owner’s group holds a Tier 3 or Tier 4 license. 

4) How much would I owe?

• $4,000 for the July–Dec 2026 period, then $8,000/year starting 2027. 

• Plus $2,000 (2026) / $4,000 (2027+) if corporate-owned or labeled a repeat code violator. 

5) Is an LLC considered a corporation for the sake of this tax?

Yes.  From our understanding an LLC, in any form, would be considered “corporate-owner” for the purposes of this tax.

6) For multi-unit properties would I need to pay the tax for each unit in the property that is a short term rental?

Yes. 

7) When would I pay it?

For the initial 2026 period, payment (or exemption/exclusion documentation) is due by March 31, 2027. For subsequent years, by March 31 for the prior year. 

8) What if I don’t pay (or don’t document an exemption)?

• A 10% delinquency penalty applies. 

• There is also an “evasion” penalty that can equal 100% of the tax if the City determines actions were taken primarily to avoid the tax. 

• The City may assess the tax, audit, and pursue liens/collection actions. 

9) Are there exemptions for small owner-occupants?

Yes. If you own a property of four or fewer units (including ADUs/JADUs) that is your principal residence, and you don’t own any other residential unit in the City, you may be exempt, but not if the property is under corporate ownership. 

10) What “exclusion periods” can reduce or eliminate tax liability?

The measure creates an “ESH and vacation home exclusion period” that can include:

• disaster period (up to two years after catastrophic event),

• homeowner exemption period (per Assessor records),

• lease period (bona fide lease),

• non-ownership period,

• owner death period,

• owner in care period,

• qualifying military service period. 

To avoid tax:

• For July–Dec 2026, you must substantiate at least 92 days of exclusion period. 

• For 2027+, at least 183 days of exclusion period. 

11) What records will owners be expected to keep?

The measure requires owners to retain records for 10 years, and allows audits with notice served within 10 years of payment or exemption/exclusion submission. 

12) Where does the money go?

The measure allows Council to deposit proceeds into the General Fund and use it for general municipal services, so there is no guarantee that the money will be used toward its stated goal of developing more housing.

13) Can the City Council change the measure later?

The measure says Council may amend it to further its purposes or correct ambiguities, but cannot change the dollar amounts, expand exemptions, or amend the amendment authority section. 

14) What’s the June 2026 election date again?

June 2, 2026 is the statewide primary election date.

15) Why is Councilmember Sean Elo Rivera proposing this?

This tax is being proposed to punish responsible operators for renting their homes out on a short term basis and force short term rentals to convert into long term housing stock while also generating revenue for the City.