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Paradise Valley lets you build a guest house on most residential lots, but it does not let you rent it out on its own. Town Zoning Ordinance Section 1004.D says no accessory building may be leased, subleased, or rented separate and apart from the main house. That one rule changes how buyers should value a casita, and it surprises a lot of people who have read that Arizona now requires cities to allow accessory dwelling units.
What the rules say
- Guest house defined: "An accessory building of one or more rooms designed for occupancy by not more than one family," with its own sanitary facilities (Town Zoning Ordinance, Section 201, viewed Oct 29, 2026)
- Where it is allowed: a guesthouse is listed as a permitted accessory use in R-43, and any detached accessory building must sit at least 60 feet from the front lot line (Section 502.3, viewed Oct 29, 2026)
- Height and stories: one story, 16 feet maximum in R-175 and R-43, 15 feet in R-35, R-35A, R-18, and R-18A (Table 1001B, viewed Oct 29, 2026); the Town's submittal checklist says the 16 foot limit includes the chimney (Standard Residential Flatland Submittal Requirements)
- Side and rear setbacks: 20 feet in R-175 and R-43, 10 feet in R-35 through R-18A, 40 feet (35 in R-18A) on a side or rear that faces a street (Table 1001B, viewed Oct 29, 2026)
- Size cap: all accessory buildings and structures together may not occupy more than half of the main building's ground area (Section 1005.A), and everything under roof counts toward the 25% floor area ratio (FAR Certification, revised Feb 17, 2026)
- Rental rule: the entire property must be rented as a whole, short term or long term (Town of Paradise Valley FAQ, Short-Term or Vacation Rental, viewed Oct 29, 2026)
- State ADU law: A.R.S. 9-461.18 applies to a municipality "with a population of more than seventy-five thousand persons" (subsection H, viewed Oct 29, 2026); Paradise Valley population 12,251 (U.S. Census Bureau, July 1, 2025 estimate)
Why the state casita law does not reach Paradise Valley
Arizona's accessory dwelling unit statute requires larger cities to allow at least one attached and one detached ADU on single family lots, bars them from prohibiting long term rental of an ADU, and caps rear and side setbacks at five feet. Those are real changes, and larger neighbors like Phoenix and Scottsdale fall under them. But subsection H limits the whole section to municipalities above 75,000 people. Paradise Valley is about one sixth of that size, so its own zoning ordinance still controls.
That is why a buyer can read a headline about statewide casita rights and still get a different answer from the Town. In Paradise Valley there is no accessory dwelling unit category at all. There is a guest house, which is an accessory building, and there is one main building per lot (Section 1004.C).
How the size limits work in practice
Two tests decide how big a guest house can be, and both count more than the guest house itself.
The half of the footprint test
Every accessory building and structure on the lot is added together: guest house, detached garage, ramada, gazebo, and similar roofed structures. That total may not exceed one half of the main house's ground area. The Town's permit guide notes that ground area does not include overhangs. For example, a single story home with 6,000 square feet of ground area allows up to 3,000 square feet of accessory structures in total. A 1,200 square foot guest house plus a 600 square foot ramada would use 30% of that ground area, within the limit (calculated by Arizona Luxury Partners).
The 25% floor area test
On R-175, R-43, R-35, R-35A, R-18, and R-18A lots, total floor area under roof, including any second story and all accessory buildings, may not exceed 25% of the lot. On a one acre lot of 43,560 square feet, that is 10,890 square feet. The example above, 6,000 plus 1,200 plus 600, totals 7,800 square feet, or about 17.9% of a one acre lot (calculated by Arizona Luxury Partners). The Town requires a stamped FAR certification at framing or roof nail inspection once a project reaches 22%.
What this means for buyers and owners
A guest house in Paradise Valley is space for family, guests, or residential staff employed on the premises. Section 1005.B says no accessory building may be used for dwelling purposes other than by residential staff employed on the premises or as otherwise permitted in the ordinance. It is not an income unit. If you rent the property, short term or long term, the house and guest house go together.
The code also defines a "dwelling unit" as rooms with their own cooking and sanitary facilities, while the guest house definition mentions only sanitary facilities. If a full kitchen matters to you, get the Town's position in writing before you design around it or pay for it in a purchase price.
Practical steps before you buy or build
- Confirm the zoning district. Height and setbacks differ between R-43 and R-35 or R-18 lots. R-10 and cluster plan lots have their own rules, so ask Community Development.
- Measure the front setback first. A detached guest house must be 60 feet back from the front lot line in most districts, deeper than the main house's 40 foot front setback in R-43. On a shallow lot that alone can rule it out.
- Run both size tests early. Add up every existing roofed accessory structure before sketching a new one.
- Check the permit file for an existing guest house. Ask for the permit history and final inspection so you know the structure was approved as built.
- Plan for septic and sprinklers. The Town requires fire sprinklers in new structures, and its permit guide says a septic permit is required when adding bedrooms or guest houses to a property on septic.
- Build the timeline in. The Town says each plan review round may take up to 30 business days, plus 3 to 5 business days to issue the permit (Building Permit Application Information, updated April 2026). Hillside lots go through additional review.
- Avoid this mistake: do not pay a premium for a casita based on projected rental income. Under Section 1004.D it cannot be rented apart from the main house.
- Avoid this mistake too: buying a vacant lot planning to build the guest house first. Section 1005.B says accessory buildings may not be built until construction of the main building has actually begun.
The honest caveats
This is a summary of the Town's published rules as of October 29, 2026, not a site specific review. Hillside lots are governed by Article XXII and measured differently. Older guest houses may be legal nonconforming structures with their own rules. HOA covenants and recorded plats can be stricter than the Town code. Rules change by ordinance, so confirm with the Town of Paradise Valley Community Development Department, and talk with an attorney or architect for your specific lot.
Frequently asked questions
Can I build a casita or guest house in Paradise Valley?
Yes, on most residential lots. The Town's zoning ordinance lists a guesthouse as a permitted accessory use in R-43, and it sets accessory building height and setback limits for its other single family districts. It must be one story, meet the setbacks for your district, and fit under the Town's size and floor area limits.
Can I rent out my Paradise Valley guest house?
Not on its own. Zoning Ordinance Section 1004.D bars renting an accessory building separate and apart from the main house, and the Town's FAQ says the entire property must be rented as a whole. You can rent the whole property, house and guest house together, subject to Town and HOA rules.
Does Arizona's ADU law apply in Paradise Valley?
No. A.R.S. 9-461.18 applies only to cities and towns with more than 75,000 people, and the U.S. Census Bureau estimated Paradise Valley's population at 12,251 as of July 1, 2025. The Town's own zoning ordinance controls guest houses there.
How big can a guest house be in Paradise Valley?
There is no single square foot cap. All accessory buildings and structures together may not exceed half of the main house's ground area, and total floor area under roof, including the guest house, may not exceed 25% of the lot in R-175 through R-18A. Your existing ramadas, garages, and other roofed structures count toward both limits.
How tall can a guest house be in Paradise Valley?
Accessory buildings are limited to one story. Table 1001B allows 16 feet in R-175 and R-43 and 15 feet in R-35, R-35A, R-18, and R-18A, and the Town's submittal checklist says the 16 foot limit includes the chimney. Hillside lots are measured under separate rules.
The bottom line
A guest house can add real living space to a Paradise Valley property, but it is space for the household, not a rental unit. The state casita law does not apply, so the Town's 60 foot front setback, one story limit, half of the footprint test, and 25% floor area cap decide what fits. Check the zoning district, the existing structures, and the permit history before you price a lot or a home around a guest house.
Read more: Buying a Paradise Valley teardown: floor area, setbacks, sewer, and permits and Paradise Valley hillside lots: how slope decides what you can build
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Sources
- Town of Paradise Valley Zoning Ordinance (Town Code Appendix A), Sections 201, 502.3, 1004, 1005, and Tables 1001-A1 and 1001B, Municode, viewed Oct 29, 2026. Link
- Town of Paradise Valley, FAQ: Short-Term or Vacation Rental, viewed Oct 29, 2026. Link
- Town of Paradise Valley, Floor Area Ratio (FAR) Certification for Main House, Addition, Guest House, or Accessory Structure, revised Feb 17, 2026. Link
- Town of Paradise Valley, Building Permit Application Information, updated April 2026. Link
- Town of Paradise Valley, Standard Residential Flatland Submittal Requirements, viewed Oct 29, 2026. Link
- Arizona Revised Statutes 9-461.18, Accessory dwelling units, viewed Oct 29, 2026. Link
- U.S. Census Bureau QuickFacts, Paradise Valley town, Arizona, population estimate July 1, 2025 (V2025). Link
- Accessory share and floor area examples calculated by Arizona Luxury Partners: 6,000 sq ft main house ground area x 50% = 3,000 sq ft; (1,200 + 600) / 6,000 = 30%; 43,560 sq ft x 25% = 10,890 sq ft; (6,000 + 1,200 + 600) / 43,560 = 17.9%.
All information provided is deemed reliable but is not guaranteed and should be independently verified. This article is for general information only and is not financial, lending, legal, or tax advice. Arizona Luxury Partners | Real Estate Group at RE/MAX Fine Properties, 21020 N. Pima Road, Scottsdale, AZ 85255. Brokerage License LC629808000. Equal Housing Opportunity.