Should Colorado Allow Short-Term Rental and Vacant Home Taxes? Here’s what some Western Slope legislative candidates are saying

Regardless of the outcome of November’s Colorado legislative election, one thing is certain for the victors on the Western Slope: They will be asked to weigh in on debates over short-term rentals, vacation homes and housing affordability.

How involved the state should be in these issues has been one of the most contentious topics on Capitol Hill in recent years, with no sign of the arguments stopping anytime soon. So far, efforts to classify second-home owners differently and raise taxes on short-term rentals have failed, but lawmakers have vowed to continue pursuing the concepts.

During the 2024 legislative session, lawmakers received hundreds of emails about two ultimately failed bills which would be almost four times the fees for some propertiesincluding Airbnb, Vrbo and other rentals.

---

---

Other bills they included measures to give fewer tax breaks to holiday home owners. lawmakers they suggested they will bring this concept back in future sessions.

The Colorado Ski Towns Association, also known as CAST, recently announced a list of policy ideas wants to be pursued by state lawmakers, including allowing local governments to tax short-term rentals and vacant homes and creating real estate transfer taxes.

---

---

Here’s what the candidates in the Western Slope multi-seat races had to say about the ideas:

House District 57: Velasco vs. Waller

House District 57 encompasses Pitkin and Garfield counties and the southwestern part of Eagle County. The candidates there they are Elizabeth Velasco, D-Glenwood Springs, and real estate businessman Caleb Waller, R-Silt.

Velasco opposed Senate Bill 233, the short-term rental bill considered earlier this year, which would have taxed short-term rentals occupied more than 90 days a year as lodging properties, rather than residential.

But the lawmaker said he supports ideas proposed by the Colorado Ski Towns Association, including allowing local governments to ask voters about taxing vacant homes and short-term rentals.

“I think the local community needs to create their own solutions,” she said, “and this will make sure we protect local control.”

Instead of requiring a certain tax level for short-term rental fees, as proposed in Senate Bill 33, the Colorado Ski Towns Association is proposing simply allowing local governments to set a tax rate for properties if their community supports it.

She’s also considering someday sponsoring a bill that would allow real estate transfer taxes, with the proceeds going toward affordable housing, she said.

“It’s about local communities being able to raise funds for affordable housing projects,” she said. “Right now, they definitely need the support of the state and the federal delegation.”

Waller, who owns short-term rental properties in Silt, said he supports the idea of ​​some short-term rental owners paying more in property taxes.

“When a person moves in from beyond — say five or six rentals a night — I think they should be treated like the hotel industry and pay the same tax they pay the hotel industry,” he said.

He also said that while he generally leans toward a free market approach, he is open to having conversations about the other ideas proposed by the Colorado Ski Towns Association. He called the vacancy tax “an interesting idea.”

“The status quo is not working,” he said. “I’m willing to compromise if it’s in the best interest of the people in my district.”

House District 13: McCluskie vs. Williams

The race to represent House District 13 — which spans Chaffee, Grand, Jackson, Lake, Park and Summit counties — is between House Speaker Julie McCluskie, D-Dillon, and businessman Dave Williams, R-Buena Vista.

McCluskie opposed bills to raise taxes on some short-term rentals this year and said he would prefer to leave regulations in the hands of local officials.

“I think municipalities and counties have worked hard to find the right balance,” she said. “I’m really in front of those local leaders because they’re in touch with their communities to try to create something community-specific.”

She did not say whether she supported the proposals from the Colorado Ski Towns Association and said she would not have a position until she saw the details laid out in the proposed legislation.

Williams said he would “never support anything at the state level” targeting short-term rentals or second homes, adding that a tax increase would only hurt the viability of vacation rentals, which are intrinsically tied to local economies.

He said he doesn’t think taxation or regulation would make vacation homes or short-term rental properties more affordable for local workers.

“I don’t see any way that the government getting involved in this is going to make things better,” Williams said.

Senate District 5: Buerger vs. Catlin

Senate District 5 includes all of Pitkin, Gunnison and Hinsdale counties and portions of Delta, Montrose, Garfield and Eagle counties. The candidates are businessman Cole Buerger, D-Glenwood Springs, and Rep. Marc Catlin, R-Montrose.

Buerger said that while he believes local control and protecting small short-term rental operations is essential, he wants to discourage vacant housing units.

“Any revenue that comes from these should be used to finance more affordable and affordable housing through public, private partnerships or the affordable housing loan fund that the state created years ago,” he said.

Catlin also said he wants to protect mom-and-pop operations and stresses the importance of private property rights when asked about short-term rentals.

“They are retirees renting units to supplement their income. Those are not the people we should be trying to get out of the market,” he said.

House District 26: Butler vs. Lukens

House District 26 includes Routt, Moffat and Rio Blanco counties and most of Eagle County. The race is between incumbent Meghan Lukens, D-Steamboat Springs, and veteran and former Craig City Council member Nathan Butler, R-Craig.

Lukens said he believes local governments should be empowered to regulate short-term rentals and tax vacant or secondary homes if their community supports it.

“Some communities in Northwest Colorado have already successfully implemented short-term rental tax measures,” she said.

Butler said he hasn’t yet developed a policy position on the ideas, but that he generally doesn’t support raising taxes.

“We need to cut wasteful spending before we try to increase the tax flow,” he said.

Ballots have been mailed out and election day is November 5th.

Regional Housing reporter Robert Tann contributed to this story.