America's Property Tax Advisor

Colorado Proposal Targets Short-Term Rentals


Property taxes on short-term rental properties in Colorado would more than triple under a proposal being considered by state lawmakers.


Bill 9 drafted by the Joint Budget Committee, would tax vacation homes the same as hotels and motels, which are subject to a higher assessment on the days they are being rented.


How it Works


Under Bill 9, if a home is rented as a short-term rental for more than 30 days a year, the owner must pay the lodging property tax rate for each rental day instead of the much lower single-family property tax rate.


Therefore, if a property is rented out as a short-term rental for 45 days, the owner must pay a commercial property tax rate on those 45 days in a year and the single-family property tax rate on the remaining 320 days.


Lower Commercial Rate


A temporary reduction in the 29% commercial property tax assessment rate approved by lawmakers this year through Senate Bill 293 dropped the rate for some kinds of commercial property to 26.4% for tax years 2022 and 2023, down from 29%.


Proposition 120 on the November ballot would make that reduction permanent for lodging properties if it’s approved by voters.


This is not the first time Colorado lawmakers have tried to shift vacation rentals over to commercial taxation. In 2020, a similar bill was rejected after it created an uproar among resort-town real estate brokers and short-term rental owners in the state.