{"id":21065,"date":"2020-01-22T13:31:10","date_gmt":"2020-01-22T20:31:10","guid":{"rendered":"https:\/\/www.skyhinews.com\/?p=62625"},"modified":"2020-01-22T13:31:10","modified_gmt":"2020-01-22T20:31:10","slug":"state-senator-proposes-classifying-short-term-rentals-as-commercial-property-leading-to-a-tax-hike","status":"publish","type":"post","link":"https:\/\/alwaysmountaintime.com\/krky\/local-news\/state-senator-proposes-classifying-short-term-rentals-as-commercial-property-leading-to-a-tax-hike\/","title":{"rendered":"State senator proposes classifying short-term rentals as commercial property, leading to a tax hike"},"content":{"rendered":"
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FRISCO \u2014 The Colorado Association of Realtors alerted local real estate organizations Jan. 16 that a bill has been introduced in the state Senate that would change the designation of short-term rental units from residential to commercial, resulting in an increase in property taxes<\/a> from 7% to 29% across the state, according to the industry trade group. <\/p>\n

\u201cWe\u2019re very disappointed \u2026 ,\u201d Summit Association of Realtors former president Thomas Coolidge said. \u201cWe\u2019re going to reach out to our legislators on all levels and try to come up with some compromise that we feel is reasonable given that short-term rentals are such an important part of the economy.\u201d<\/p>\n

Current Summit Association of Realtors President Dana Cottrell said the association met previously with state Rep. Julie McCluskie, D-Dillon, to discuss a similar bill, which was later dropped. Senate Bill 20-109<\/a> now has been picked up by Sen. Bob Gardner, R-Colorado Springs.<\/p>\n

\u201cIt would negatively impact investors in the community if all of a sudden you have to take on this very increased property tax,\u201d Cottrell said.<\/p>\n

Cottrell said that when she met with McCluskie, the motivation McCluskie had behind sponsoring the bill was that she felt if a property was used as a type of commercial investment, it should be taxed as such. <\/p>\n

\u201cPeople want to offset their costs,\u201d Cottrell said. \u201cI want to protect the people that want to have a second home up here and want to offset those costs. I want them to use their properties as they see fit.\u201d<\/p>\n

The bill defines a short-term rental property as a building that is used \u201cpredominantly as a place of residency by a person, a family, or families,\u201d but is leased for short-term stays. For the purposes of this proposed tax law, a property qualifies as a short-term rental unit only if it is occupied by the owner for less than 30 days per year.<\/p>\n

For example, if a family on the Front Range has a second home in Summit County and stays for a month over the course of a year, they can still rent their home out on Airbnb or through a property management company for the rest of the year without being subject to commercial property taxes. <\/p>\n

Breckenridge Town Council member Gary Gallagher said the council generally supports a bill like this that applies to short-term rental properties that are being run like a business rather than families who just want to rent out their property a few times per year. <\/p>\n

\u201cFrom many of our perspectives, I think what it really comes down to is if you want to run a business, then I am very comfortable with them being treated as commercial property and being taxed as such,\u201d Gallagher said.<\/p>\n

Gallagher said a short-term rental that is being operated as a business should not get special tax benefits compared to restaurants, hotels or other commercial properties in town. <\/p>\n

\u201cLet\u2019s call it what it is: It\u2019s a business,\u201d Gallagher said. \u201cWe tax other businesses as commercial properties.\u201d<\/p>\n

Mark and Mary Waldman, owners of Summit Mountain Rentals, disagree that the 30-day caveat would protect second-home owners. <\/p>\n

\u201cThe average owner stays 14 to 20 days. It\u2019s just a gimmick to make it more palatable,\u201d Mark Waldman said about the 30-day exception. <\/p>\n

If the bill were to be enacted, the Waldmans think it would affect more than just real estate. <\/p>\n

\u201cFor those of us who live in the mountain community, it will be a collapse in real estate prices because the people who own here \u2026 are heavily dependent on tourism for our sales tax dollars. If these homeowners are taxed 3.14 times more \u2026 they simply won\u2019t rent, and then they\u2019ll choose to sell,\u201d Mary Waldman said. <\/p>\n

The Waldmans added that this would have immediate impacts on real estate professionals in the area. Summit Mountain Rentals has a staff of 43 people, but the Waldmans said this would have to be reduced if the bill passes. <\/p>\n

\u201cIf this tax hits, a large portion of that staff goes away to accommodate that reduction in economic needs,\u201d Mary Waldman said.<\/p>\n

Mark Waldman said they are forecasting a 20% to 50% reduction in rental units.<\/p>\n

\u201cWe feel it\u2019s a very short-sighted effort to try to collect some more taxes,\u201d Mary Waldman said, adding that as a representative from Colorado Springs, Gardner sees a very different economy. \u201cBig cities, they don\u2019t rely on 90% of their income from the tourism industry. I feel that he doesn\u2019t understand the mountain community.\u201d<\/p>\n

Breckenridge Mayor Eric Mamula explained that as the town of Breckenridge doesn\u2019t rely heavily on property taxes, he doesn\u2019t anticipate a major economic impact should the bill pass.<\/p>\n

\u201cThere has been some discussion that, look, these things are commercial enterprises, and that\u2019s how they should be taxed,\u201d Mamula said. \u201cSome of these homes that are rented all year long, they have impacts on the community, and they have impacts to the county at large.\u201d<\/p>\n

Mamula pointed out that the town of Breckenridge mainly exists on sales tax and while the bill could decrease homes in the short-term rental pool, it could then free up homes for the long-term rental market. He said that when Airbnb and VRBO came onto the scene, many of these long-term rental units that were used by local employees were eaten up by the more profitable short-term rental market. <\/p>\n

\u201cMaybe this just balances things back out the way that it was beforehand,\u201d Mamula said. \u201cIt is hard to gauge the long-term effects of a decrease in short-term rentals, but an increase in long-term rentals? That we sorely need.\u201d<\/p>\n

via:: Sky-Hi News<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

FRISCO \u2014 The Colorado Association of Realtors alerted local real estate organizations Jan. 16 that a bill has been introduced in the state Senate that would change the designation of short-term rental units from residential to commercial, resulting in an increase in property taxes from 7% to 29% across the state, according to the industry trade group.  […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[56],"tags":[],"class_list":{"0":"post-21065","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-local-news"},"acf":[],"publishpress_future_action":{"enabled":false,"date":"2026-06-17 15:37:32","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"KRKY Ski Country","distributor_original_site_url":"https:\/\/alwaysmountaintime.com\/krky","push-errors":false,"_links":{"self":[{"href":"https:\/\/alwaysmountaintime.com\/krky\/wp-json\/wp\/v2\/posts\/21065","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alwaysmountaintime.com\/krky\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alwaysmountaintime.com\/krky\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/krky\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/krky\/wp-json\/wp\/v2\/comments?post=21065"}],"version-history":[{"count":0,"href":"https:\/\/alwaysmountaintime.com\/krky\/wp-json\/wp\/v2\/posts\/21065\/revisions"}],"wp:attachment":[{"href":"https:\/\/alwaysmountaintime.com\/krky\/wp-json\/wp\/v2\/media?parent=21065"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/krky\/wp-json\/wp\/v2\/categories?post=21065"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alwaysmountaintime.com\/krky\/wp-json\/wp\/v2\/tags?post=21065"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}