Legal Advice for Colorado Rental Property Owners
Owning a short term rental—or any rental property in Colorado—comes with a lot of challenges. There are governmental requirements to navigate, including whether a business license or other registration is necessary, sales taxing on short term rentals, and the importance of a strong enforceable lease. The Colorado real estate attorneys at Folkestad Fazekas can help you navigate all things related to renting your property and protecting your asset. We can advise on use of an LLC for further asset protection and we assist in the formation and ongoing representation of such business entities. Call us today for your rental questions.
Alert! Possible increase in property taxes for short term rental properties
Do you rent your second home on VRBO, Airbnb, or through other short term rental options? Then a bill introduced in the Colorado senate may impact you heavily. Colorado is a wonderful tourist destination, and has such amazing mountain (or city) experiences to offer. A large number of people own second homes around the state in order to further enjoy those experiences. Owning a second home is expensive, of course, and many second home owners offset the costs by renting the residence on a short term basis for other tourists to enjoy. Residential real estate is taxed at a rate of 7.15%, while commercial properties in Colorado are taxed at a rate of 29%. Second homes are residences, and currently all residences are taxed at the lower rate. The new bill would classify short term rental properties as commercial, leading to a big jump in taxes for the owners. The bill includes an exception for owners that occupy the rentals for more than 30 days a year—purportedly allowing real “users” of their second home to offset costs and keep a lower tax rate while trying to distinguish more fully rented properties as commercial businesses. There are strong feelings on both sides of this issue and it is unclear what the outcome will be, but it is an issue to watch closely for any short term rental owner in Colorado. To read more: https://www.skyhinews.com/news/state-senator-proposes-classifying-short-term-rentals-as-commercial-property-leading-to-a-tax-hike/
Call and speak to one of our experienced Colorado rental attorneys today at 303-688-3045 for a free telephone evaluation of your issues.
