Do You Need a Business License to Rent Out a House in El Segundo? (Measure BT)

Published August 10, 2026

El Segundo treats a rented house as a business, and the city registers it under the Property Rental & Lease category. Here is what the 2026 rate schedule charges, what Measure BT changed, and the January 31 deadline.

Yes. If you rent out a house in El Segundo, the city treats you as a business and requires a business tax registration under its "Property Rental & Lease" category. For 2026 the city's published rate schedule lists $162.60 covering the first three units, plus a $4.00 state access fee. Renew by January 31 each year.

Last verified: August 10, 2026

Where the requirement actually comes from

The City of El Segundo puts it plainly on its own Business Tax Registration page: before starting business operations in El Segundo, every individual or entity, whether or not they are subject to taxation, must apply for and obtain a business license. The city's application menu makes the landlord case explicit with its own form, "Property Rental & Lease," described as being for property owners of commercial or industrial locations, residential and apartment rentals.

There is no carve out for a single house. A rental house, a duplex, and a 30 unit building all enter through the same door. The difference is how many units you declare.

The counting rule sits in El Segundo Municipal Code §4-1-12, which sets the basis for the fee. The amount owed turns on things like the number of persons employed, the square footage of floor space, or the number of rooms or units in any building or structure. For a landlord, it is units.

What it costs in 2026

The city's published Business License Rates 2026 schedule lists the residential rental line under ESMC §4-2-10(B). The 2026 figures are $162.60 for the first three units and $162.60 for each additional unit, plus the $4.00 AB 1379 CASP fee that state law adds to every local business license application and renewal.

So the arithmetic for one rented house in El Segundo is $162.60 plus $4.00, or $166.60 for the year. A duplex is the same, because two units still fall inside the first three. A fourth unit is where the number moves.

One nuance nobody mentions. The rate schedule notes that one owner occupied unit can be excluded from the count. That helps the owner living in half a duplex. It does nothing for an owner who moved out and rented the whole house, because no unit is theirs to occupy.

What Measure BT changed

El Segundo voters passed Measure BT at the November 8, 2022 municipal election, and it took effect January 1, 2024. Two pieces of it matter to landlords.

First, it aligned apartment and hotel businesses to the base business license tax structure. The city's own fact sheet describes the parallel hotel rule the same way, $150 for the first three rooms and $150 for each additional room. That is the shape now applied to rental units, which is why the per unit figure is flat rather than a small add on.

Second, it changed the annual escalator from a ten year average to the most recent five year average increase of the Consumer Price Index. That is why the 2024 base of $150 reads as $162.60 on the 2026 schedule. Do not memorize the figure. Check the current year's schedule before you pay.

The deadlines owners actually miss

Two dates, both in the code.

Under ESMC §4-1-12(C), a business seeking its initial El Segundo license must file the registration application within the first five days of business activity, unless the licensing authority grants a written extension. If you closed escrow and handed over keys, the clock has started.

Under ESMC §4-1-12(B), the renewal application must be filed before January 31 of each year, signed under penalty of perjury. The city mails courtesy renewal notices in December. Failing to receive one does not excuse the renewal, and applications can take up to ten business days to process, so the last week of January is not the time to start.

Short-term rentals are a separate track

If you are renting by the night rather than by the year, this is the wrong article. El Segundo runs a distinct Short-Term Home Sharing permit program with its own eligibility rules, permit fees, and transient occupancy tax on top of the business registration. The city also excludes short-term rentals from online self service, so you have to contact the Revenue Division directly.

The practical version

For most owners of one El Segundo rental this is a small annual line item. Do it on time anyway, because an unregistered rental tends to surface during a sale or a permit application. The Revenue Division answers at 310-524-2317.

Figures here come from the City of El Segundo's published 2026 rate schedule and the El Segundo Municipal Code as of the verification date above. Rates adjust annually by CPI under Measure BT. Confirm current figures with a licensed professional before relying on them.

Frequently asked questions

Do I need an El Segundo business license if I live out of state and just own one rental here?

Yes. The registration follows the business activity, which is the rental of property located in El Segundo, not where the owner lives. The city publishes a separate application path for owners located outside the city.

Is the rental business license the same thing as a business tax certificate?

Yes. The city uses "business license," "business tax certificate," and "business registration" interchangeably. When you pay the tax, it issues a business registration tax certificate.

Does my property manager handle this for me?

Not automatically. The registration belongs to the property owner, and the manager's own license does not cover it. Ask your manager directly whether they file and renew it on your behalf.

What happens if I have four or more units?

The first three units are covered by the base figure, and each unit beyond that is charged at the same per unit rate on the 2026 schedule. An owner occupied unit can be excluded from the count. Confirm your unit count with the city before renewing, since the renewal is signed under penalty of perjury.

Topics: El Segundo, business license, Measure BT, landlord compliance, rental property, South Bay

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