San Diego Transient Occupancy Tax (TOT) Update 2025-2026: Measure C Explained

Effective May 1, 2025, San Diego's Transient Occupancy Tax (TOT) structure changed significantly.

Voters approved Measure C, restructuring how TOT is applied across the City by dividing San Diego into three distinct tax zones, each with its own rate.

For short-term rental operators, this change directly impacts nightly pricing, revenue modeling, and guest-facing tax transparency.

What Is Measure C?

Measure C is a voter-approved initiative that restructured San Diego's Transient Occupancy Tax.

Instead of a uniform citywide rate, San Diego is now divided into three tax zones, each with a different TOT percentage.

As of May 1, 2025, the rates are:

• 11.75%
• 12.75%
• 13.75%

The applicable rate depends on the geographic tax zone in which the lodging property is located.

Why This Matters for STR Operators

Transient Occupancy Tax is collected on stays of less than one month.

For STR hosts and operators:

• TOT is added to the guest's total bill.
• The operator is responsible for proper collection and remittance.
• The correct rate must be applied based on the property's tax zone.

Failure to apply the correct zone rate could create compliance risk.

How to Determine Your Tax Zone

The City provides an interactive tax zone lookup map that allows property owners to determine which zone applies to their address.

1. Visit the City's interactive TOT tax zone map.
2. Enter your property address.
3. Confirm the assigned tax zone.
4. Apply the corresponding TOT percentage (11.75%, 12.75%, or 13.75%).

Operators should verify this directly through the official City tool rather than relying on third-party summaries.

Official Measure C Resources

• Measure C Frequently Asked Questions
• Measure C News Release - March 20, 2025
• Measure C Tax Zone Boundaries Shapefile Download (Search: Transient_Occupancy_Tax_Zone_SD)

The shapefile is particularly relevant for developers, analysts, and operators integrating geospatial tax data into compliance or pricing systems.

Operational Implications for 2026

1. Revenue Modeling

Higher TOT does not reduce gross booking revenue directly, but it increases the total cost to guests. In competitive submarkets, guest sensitivity to total price may influence booking velocity.

2. Pricing Strategy

Operators should review:

• Whether nightly rates require adjustment
• How cleaning fees + TOT affect total checkout price
• Event-based pricing thresholds under new tax rates

3. Compliance Oversight

Hosts must ensure:

• Correct zone classification
• Updated platform tax settings
• Proper remittance under revised rates

Strategic Considerations

San Diego's shift to zone-based TOT introduces geographic variation in effective tax burden.

Operators in higher-rate zones may experience slightly higher guest-facing totals, increasing the importance of listing optimization and pricing precision.

Final Takeaway

Measure C materially changed San Diego's Transient Occupancy Tax structure beginning May 1, 2025.

Key actions for STR operators:

• Confirm your property's tax zone
• Apply the correct TOT rate (11.75%, 12.75%, or 13.75%)
• Adjust pricing models if necessary
• Monitor City guidance for future amendments

Regulatory precision is foundational. Once tax compliance is correct, performance optimization becomes the next lever.