Commercial Real Estate in Monte Sereno: A Residential-Only City, Home Businesses and Public Sites

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Monte Sereno is one of the few California cities with no commercial zoning at all. Its zoning code sets up single-family, multifamily, public and planned development districts, and nothing designed for shops, offices or industry, so the commercial questions here are about home-based businesses, public and institutional sites, and the commercial districts of neighboring Los Gatos and Saratoga. If you are looking at a Monte Sereno address for a business use, confirm with the City of Monte Sereno planning staff that the parcel is inside city limits and what its zoning allows before you sign anything.

Who controls the parcel

Title 10 of the Monte Sereno Municipal Code is the city’s planning and zoning law. Its stated purposes are to guide growth by the community’s plans, protect the city’s high-amenity residential character, rural atmosphere and scenery, and provide water, sewer and drainage in a way that fits that residential nature. A mailing address does not always show which city a parcel is in, and some nearby hillside parcels are unincorporated County land, so check the jurisdiction on the parcel record. For County rules, see our Santa Clara County commercial guide; for the nearest commercial districts, see Los Gatos and Saratoga.

Monte Sereno zoning: what non-residential use is possible

Chapter 10.05, most recently amended by Ordinance NS-242 on December 3, 2024, sets the districts below. None is a commercial district.

District	Intended uses	Non-residential uses allowed
R-1-44 Residential	Single-family on about one acre, 120 ft frontage	Home occupations, horticulture; schools, churches, community centers, noncommercial swim and tennis clubs and private stables by use permit
R-1-20 Residential	Single-family on about half an acre	Home occupations; same institutional uses by use permit
R-1-8 Residential	Single-family on 8,000 sq ft	Home occupations; same institutional uses by use permit
RM Multi-Family Residential	Single-family, duplex or triplex	Home occupations; churches and community centers by use permit
P Public	Public facilities, small emergency shelters, supportive and transitional housing	Churches, community centers and public recreation by use permit
P/RM Public/Residential Multi-Family	Attached homes alongside a public use	Home occupations
PD Planned Development	Combined with a base residential district on 4+ acres	Only the uses in the PD permit

The code’s institutional uses are the closest thing to commercial real estate in Monte Sereno: a church, school or club site in a residential district operates under a use permit, and that permit, not the zone, decides what can happen there.

Conservation zone and scenic corridors

Conservation Zone. Properties in the Conservation Zone, a scenic highway or a scenic roadway corridor need a building site of at least 5,400 square feet with an average slope under 40%. No commercial uses are allowed unless commercial zoning is later established. Structures must stay at least 32 feet from the 100-year flood influence line.
Scenic corridors. Along the Saratoga-Los Gatos Scenic Highway and the Quito Road Scenic Corridor, visible fences, walls and structures need architectural review. Removing screening vegetation within 50 feet is barred unless replanting is approved. These rules matter for any institutional site along those roads.
Signs and lighting. Chapters 10.13 and 10.17 regulate signs and outdoor lighting, which constrains what a home business or institution can display.

Home businesses and other Monte Sereno rules

Home occupations. Home occupations are permitted in every residential district. Under Chapter 7.01, no business license is needed if the work is done inside the home or an accessory building, is clearly incidental, employs only household members, and uses at most one small unlit sign. The code text on this point is partly garbled, so confirm the conditions with City Hall.
Business license. Other businesses working in the city, including contractors, delivery operations and professionals, pay an annual license fee set by council resolution, running from July 1. The chapter says its purpose is revenue, not regulation.
Room rentals. Renting rooms to up to two people is permitted in residential districts, and a boarding or lodging house with fewer than four sleeping rooms pays no license fee.
Cannabis. Chapter 10.26 regulates medical marijuana and cultivation; review it before considering any related use.

Transfer tax, business tax and property tax

County documentary transfer tax. The County’s real property transfer tax chapter charges $0.55 per $500 of consideration and credits a conforming city tax set at half that rate.
City transfer tax. Monte Sereno’s Chapter 3.02 sets $0.275 per $500 under the state enabling law and is administered by the County Recorder. That matches the half rate the County credits, so the total should stay at $0.55 per $500; confirm on the escrow estimate.
Business tax. The Chapter 7.01 license fees above.

A change of ownership generally triggers Proposition 13 reassessment.

Due diligence that matters in Monte Sereno

Start with our commercial due diligence checklist, then add:

Confirm the parcel is in Monte Sereno, not Los Gatos or unincorporated County land.
For a church, school or club site, obtain the use permit and any conditions, hours or enrollment limits.
Check whether the parcel is in the Conservation Zone or a scenic corridor.
For a home business, confirm it meets the home occupation conditions, or budget for a license.
On a PD site, read the PD permit; only its listed uses are allowed.
Remember that a business needing a storefront or office will likely end up in Los Gatos or Saratoga.

Questions people ask

Is there commercial zoning in Monte Sereno?

No. The zoning code establishes only residential, public and planned development districts, and the Conservation Zone bars commercial uses unless commercial zoning is created.

Can I run a business from my Monte Sereno home?

Yes, as a home occupation. If it stays inside the home, employs only household members and uses one small unlit sign, no business license is required.

Do contractors need a Monte Sereno business license?

Generally yes. Businesses bringing materials into the city or working there for profit pay an annual license fee set by the City Council.

Can a church or school operate in Monte Sereno?

Yes, with a use permit in the residential districts, and churches and community centers are also allowed by use permit in the P district.

Does Monte Sereno have a transfer tax?

Chapter 3.02 sets $0.275 per $500, administered by the County Recorder, which appears to share the County’s $0.55 rate rather than add to it.

What are the scenic corridors?

The Saratoga-Los Gatos Scenic Highway and the Quito Road Scenic Corridor, where visible structures need architectural review and screening vegetation is protected.

Does Diamond handle commercial property in Monte Sereno?

Contact Matthew Martinez to discuss buying, selling or leasing property in Monte Sereno, or commercial property in nearby Los Gatos and Saratoga.

Sources & notes

Note: We did not review the zoning map, the home occupation definition in Chapter 10.01, the sign and lighting chapters or license fee amounts. That the city and County tax share one rate was inferred from the County credit rule.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

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