An Opinion Piece by West + Main Homes Agent, Doug Yetman.
If passed, a bill currently being considered in the Colorado Legislature (SB SB24-033) would tax many small and individual property owners at a rate higher than that currently faced by national hotel corporations. Such a tax would likely make home ownership of this type impossible and possibly force others to have to sell their properties.
In its current form, the bill would tax short term rentals (STRs) rented for 90 days or more at the lodging tax rate, on par with hotel and bed-and-breakfast properties. This could as much as quadruple property taxes for short-term rentals that rent more than 90 days per year, relative to existing rates. Primary residences and properties rented for less than 90 days per year would remain at the residential rate.
While the intent is to address the affordable housing crisis—a noble and urgent cause—the method stirs deep concerns. Is quadrupling tax bills for short-term rental owners the right approach to making housing more accessible, or does it merely encroach upon the hard-earned freedoms of property owners? I think not.
As a Realtor® with West and Main Homes, I have helped numerous families purchase vacation properties that were also very important family investments. I too am a vacation property owner and I see first-hand how these exorbitant taxes could deal a crippling blow to individual property owners AND local economies. Since our purchase, we have brought tens of thousands of dollars to our local community (Buena Vista) in the form of property taxes, lodging taxes, sales taxes not to mention the tens of thousands we have paid in supporting the other local entrepreneurs who work with us cleaning our property, fixing, repairing, painting, purchasing items for the home, etc.
This isn't merely a fiscal debate; it's a pivotal moment for property and individual rights. The potential fallout is broad reaching: statewide tourism could be stifled, local economies could be impacted, municipal services (like fire and EMTs), could be underfunded and it could also prompt a downturn in an already challenged real estate market.
For property owners Anna Zawisza and Peter Krahenbuhl, the bill threatens their ability to pay expenses associated with their vacation cabin in Buena Vista. “We both work in the nonprofit sector and made many sacrifices to purchase our dream cabin in the mountains. We rely on the short term rental income to pay some of our expenses, but it never covers everything and we still have a lot of out-of-pocket costs. For us to be taxed at these much higher rates on our sole vacation property would be detrimental.”
Affordable housing across the state and in vacation communities is a challenging and deeply complex issue. Much of this conversation is happening at the local level, where it needs to happen. Not on a state-wide, one-size-fits-all approach to taxing individual property owners. With empathy, compassion and sound fiscal policy, I feel we can find solutions that balance the needs of local citizens while also protecting the rights of induvial property owners.
I welcome your thoughts and strongly encourage you to reach out to your local representatives AND the sponsors of this bill.
Contact Doug to learn more about how changing short term rental regulations might impact you.
