Recently introduced Senate Bill 20-109 could have huge impacts on your income if you short term rent a Colorado property. In fact, if passed, your Colorado property tax on rental property would likely double. Luckily, it’s still early in the process and we all have time to voice our opinions.
What Properties are Impacted?
In the Bill, a short term rental property is described as an improvement that is used to provide short-term stays, which is overnight lodging for less than 30 consecutive days in exchange for a monetary payment. It that’s the case, it will be classified as non-residential. If it is occupied by the owner for more than 30 days in a year, even if short term rented, it can retain it’s residential status. Of course there is more text in the bill itself, which you can read here, but this is my summary of it.
Property Tax Increase
If your property is deemed to be non-residential for the property tax year, the tax rate is currently 29% of the assessed value. A residential property rate is currently just 7%. That could be a huge property tax increase.
Enforcement
I am not sure how they would police this and determine if an owner uses the property more than 30 days. However, with a lot of cities, towns and counties requiring short term rentals be registered, the state knows where to get a list of short term rentals to evaluate for the property tax increase.
More In Depth
The possibility of this tax increase has been in the works for a while now. A previous post of ours goes a little more in depth on the tax increase, and potential impacts to individuals, the rental market and the real estate market.
Voice Your Opinion
As I mentioned previously, it’s not too late to voice your opinion to the State Senator that introduced this bill, Bob Gardner. You can call him at 303-866-4880 or email him at bob.gardner@state.co.us Let him know how this bill would impact you. If you feel strongly about the change, don’t just stand by. Voice your opinion about Colorado property tax on rental property.
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