Colorado's Vacant Homes Tax Proposal: What It Means for Property Owners

On January 14, 2026, Denver-area lawmakers introduced legislation that would allow local governments to impose new taxes on residential properties classified as “vacant” or unused. The proposal would create a new property tax classification and grant municipalities broad authority to define, interpret, and enforce vacancy.

While the bill does not explicitly target short-term rentals today, it establishes a policy framework that ties housing use directly to taxation—a precedent that should concern Colorado property owners.

The Colorado Short-Term Rental Association (COSTRA) is closely monitoring this legislation and has raised serious concerns regarding its structure, enforcement, and long-term implications.

“This bill may not explicitly target short-term rentals today, but it establishes a framework that could be expanded in the future—particularly as jurisdictions face revenue pressures,” said Julia Koster, Executive Director of COSTRA.

Critically, the proposal does not clearly define how vacancy would be measured, verified, or challenged. Without objective, statewide standards, enforcement could vary widely between jurisdictions—introducing unnecessary risk for homeowners who are already licensed, regulated, and compliant.

For responsible property owners, this lack of clarity matters. When enforcement standards are vague, even compliant uses can be reinterpreted or penalized over time through amendments or inconsistent local application.

The vacant homes tax proposal is scheduled to be heard by the House Finance Committee on February 2 at 1:30 p.m. This represents a pivotal moment for homeowner advocacy.

At Moving Mountains, we believe in a homeowner’s right to use their property responsibly and as they see fit. We also firmly believe that short-term rentals provide immense value to our local communities. Without short-term rentals, there are fewer guests, fewer jobs, and a diminished local economy.

Moving Mountains strongly supports clear, predictable, and fair housing policy. Thoughtful solutions to housing challenges must not create unintended consequences for responsible property owners or small businesses that operate within existing regulations.

As housing use increasingly intersects with tax policy, working with an experienced, locally embedded management partner helps ensure that your property is:

We are closely monitoring this legislation and remain engaged with industry partners to stay ahead of regulatory developments that may impact our homeowners.

As always, our role is to help you navigate complexity, protect your investment, and operate confidently within Colorado’s evolving regulatory landscape.