Colorado lawmakers have introduced a property tax bill that would classify homes that are rented for more than 90 days a year on a short-term basis as commercial lodging properties. The property tax assessment rate for lodging properties is 27.9% compared with the 6.765% rate used this year for residential properties.

The legislation would roughly quadruple property taxes for tens of thousands of short-term rental homes in Colorado. It drew fiery testimony from more than 80 speakers at an October 31, 2023 hearing of the Legislative Oversight Committee Concerning Tax Policy, which voted to advance the bill to the full legislature, slated for January 2024.  

Upon arrival in the legislature, Bill 6 was reassigned a specific bill name and number: The Lodging Treatment for Property Tax Bill, SB24-033. This bill is authored by Senator Chris Hansen of Colorado Springs and Representative Mike Weissman of Adams and Arapahoe Counties.

After receiving its official designation as a bill, SB24-033 was scheduled to be heard by the Senate Finance Committee as its first stop in the legislative process (originally scheduled for February 20, 2024). Due to pending amendments and additional work to be done, this hearing has been delayed until sometime in March. SAVRM will keep you apprised of scheduling details as we receive them.

Monitor SB24-033 here >>

For now, enter your property info in the fields below to calculate what a 400% property tax increase would mean for your short-term rental property. The table below calculates property tax rates based on local mill levies. If SB24-033 were to pass as currently written, this calculation will show you what your new property tax would become.

Important precedent regarding commercial classification of residential properties came from a 2015 Colorado Court of Appeals decision — one of the few court rulings in the state addressing short-term rentals — that ruled “mere temporary or short-term use of a residence [by vacation renters] does not preclude that use from being ‘residential’ … that receipt of income does not transform residential use of property into commercial use.”