Do I Need a Manhattan Beach Business License to Rent Out My Property in 2026?

Published July 15, 2026

Yes, even if you live out of town. Renting in Manhattan Beach requires a business license tax, no exception for one unit.

Yes. Manhattan Beach Municipal Code Title 6 requires a business license tax for anyone conducting rental activity in the city, and the city is explicit that this applies even if your business is based outside city limits or you already hold a license elsewhere. Owning and renting out even a single unit counts. Under the city's current tax structure, an in town rental business pays a $313.88 flat tax covering the first $91,661 of gross receipts, plus $2.80 per $1,000 of gross receipts above that, capped at $12,156 per year.

Why a landlord needs a business license in the first place

It surprises a lot of owners the first time they hear it: renting out a house or condo is, in the eyes of the city, conducting business within Manhattan Beach. Title 6 of the Manhattan Beach Municipal Code governs business licenses and taxes citywide, and it is not limited to storefronts. The city's own guidance states plainly that a license is required for any business activity conducted in the city, including businesses based outside the city or already licensed elsewhere, and it specifically calls out home occupations and out of town operators as examples. A South Bay owner who lives in Pasadena, Texas, or another country but rents a Manhattan Beach property is still conducting business in Manhattan Beach.

What the current rate structure looks like

Manhattan Beach's business license tax is calculated differently depending on the type of business. Per the city's May 2026 Business License Tax Modernization Plan presentation, the current gross receipts structure for an in town business is a $313.88 flat tax covering the first $91,661 of gross receipts, plus $2.80 per $1,000 of gross receipts in excess of that. Home occupation and out of town businesses pay a $156.64 flat tax covering the first $55,765 of gross receipts, plus the same $2.80 per $1,000 above that. Apartments with three or more units are instead taxed at $29.08 per unit. Which category applies to you depends on how many units you rent and where you are based, so do not assume the first number you see online is the one on your bill.

The city also caps the maximum annual business license tax for any one business under the gross receipts method, and the current cap is $12,156 for the 2026 to 2027 licensing year. That cap matters if you own several properties licensed under one entity.

One thing to watch: the city is actively working through a Business License Tax Modernization Plan. Phase 1, an administrative cleanup of the code, was adopted in March 2026. Phase 2 would restructure the rate categories themselves, including a consolidated Property Rental category, and city staff counted roughly 469 rental businesses with about $154 million in estimated taxable gross receipts in that analysis. Any Phase 2 rate change requires voter approval, and the city's tentative timeline points to the November 2026 general election ballot. Until voters approve a new structure, the rates above are what applies.

This is separate from your property tax bill

Do not confuse the business license tax with your Los Angeles County property tax bill, or with the city's Transient Occupancy Tax, which applies to short term and vacation rentals under 30 days at a 14 percent rate. If you run a short term rental, you need both a business license and, per the city's Short Term Vacation Rentals program, a separate zoning review and TOT registration. A standard long term lease does not trigger TOT, but it still triggers the business license tax.

What this means for you

If you own a Manhattan Beach rental and have never applied for a business license, that is a compliance gap, not a formality you can skip because you live elsewhere or only have one door. Pull your current license status through the city's Revenue Services Division or the HdL licensing portal the city uses for renewals, and confirm which category your property falls under. If you are unsure whether your unit count or receipts push you into a different bracket, or whether the modernization plan rates have been formally adopted for your renewal cycle, check directly with Revenue Services before you file, because rates and categories have been actively changing.

If tracking city specific license renewals across multiple jurisdictions is not how you want to spend your afternoon, that is exactly the kind of detail we handle for owners at Schofield.

This is general information, not legal or tax advice. Confirm with a licensed professional before you act.

Sources

Last verified: July 2026.

Topics: taxes, business license tax, Manhattan Beach, landlord compliance, rental property

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Schofield Properties is a family run property management company at 323 Richmond St, El Segundo, CA 90245. We have managed the South Bay since 1972 and personally oversee about 186 doors today. Book a call to talk about your property.