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Higher Property Tax Rates on Short Term Rentals in Colorado?

More coin required for property taxes
Higher property tax rates on short term rentals in Colorado?

The state of Colorado has some proposals in the works that would raise the property tax rates on short term rentals. We have been hearing rumors of this happening since late last year. It sounds like now they are working on something to make it a reality. We need both facts and opinions about the change from as many short term rental owners in Colorado as possible.

Adjusted Property Tax Rate

The tax hike would change the tax rate of a residential property that is short term rented. Residential properties are currently taxed at 7% in Colorado. The proposal would increase the tax rate to the commercial property rate of 29%. For example, if you own a residential property worth about $318,000, you would pay about $1925 in taxes. That same property at a commercial tax rate would run you about $5000 a year in taxes. It’s a pretty substantial change.
Another angle they are considering is to only charge the higher tax rate for those that have more than one short term rental property.

Your Impact

What we would like from you is information about how the change would impact you, if at all.
– Would you sell your rental property?
– How would it impact your bottom line?
 – Would you long term rent your property instead? Those would not be subject to this higher tax rate
– Would you think twice about buying another short term rental property in Colorado?
– Would you adjust your nightly rates?
– Any additional information or comments about the change?

We’re Taking Action

We will pass all the info along to our local real estate board. Then they will compile all the data and pass it along to the Colorado Association of Realtors. The Realtor associations have some influence with the legislators and we want to put the voices of the short term rental owners in front of them before they decide to raise the property tax rates on short term rentals in Colorado.

Add Comments

Please enter comments below. We will share them and have our voices heard.

Posted in: All About Rentals, Homeowner Information Tagged: Legislation, Let's Talk, Property Taxes, STR

Comments

  1. BT says

    October 9, 2020 at 11:41 am

    Realtors thrive on the ever inflating value of real estate, even at the cost of what was once a tight-knit community. Speculative investing and second/third/etc-homeownership has permanently transformed mountain towns all over Colorado. The real estate lobby is too strong and too money thirsty to even consider regulating this change. Sad.

    Reply
    • Meredith Adams says

      October 9, 2020 at 12:17 pm

      I think it’s the state government feeling left out of the short term rental profits homeowners are making. They want a piece of the pie and changing the tax rate gives them a slice. It’s up to homeowner’s through their local real estate agents to use the real estate lobby to give the opinions of homeowners to the government officials that make the decisions. If no action is taken, the government will do what they want. At least if opinions are passed along, there is a chance they will be heard.

      Reply
  2. James Albritton says

    May 25, 2020 at 4:48 pm

    Jason & Meredith, I see this has currently been postponed, however offer feedback for future considerations. Although we are currently not a short term rental property owner, the new tax rates would cause us not to further invest in Summit County. Hotels are not the same as individual residences. They are commercial properties with corporate infrastructures. In summary;
    How would higher taxes impact you:
    – Would you sell your rental property? “Yes”
    – How would it impact your bottom line? “Significant impact, rental rates would be non-competetive, cost prohibitive to invest in Summit County.“
    – Would you long term rent your property instead? Those would not be subject to this higher tax rate. “No we would sell property and invest elsewhere. We currently long term rent our properties, already the State of Colorado has imposed a new tax on improvements, benefits of appliances installed.”
    – Would you think twice about buying another short term rental property in Colorado? “Yes, would not buy in Colorado”
    – Would you adjust your nightly rates? “Yes, increase rates until property sold and pull investments out of Colorado”
    – Any additional information or comments about the change? “Would pull out of all current investments and relocate assets.”

    Reply

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Mountain Living Real Estate, a.k.a. The Mountain Living Team, is a family owned, second generation, real estate company that has been helping buyers and sellers in Summit County since the early 90’s.  Mountain Living Real Estate is committed to going above and beyond to ensure their clients have the most amazing real estate experience possible.  Jason & Meredith take a personal approach to educate their clients, empowering them to make high quality decisions no matter the situation.  They take exceptional care throughout the sales process and beyond; striving to make each client’s path in Summit County one filled with fun, excitement & great memories.

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Jason & Meredith Adams
Mountain Living Real Estate

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