The demand for short term vacation rentals is still on the rise. In fact, renting short-term property rental is more popular than ever. Because of this, many local governments are wrestling with the tough questions of whether or not this particular industry should be regulated. If so, how? And what must the homeowner know to keep up with ordinances new and old?
Before understanding the why and how of each cities regulations, it may be a good idea to get a refresher on what is considered a “short-term” lease. Simply put, property rentals can be divided into two categories:
Short-term property rental is relatively variable. Amounts of time that define it can change from location to location. For the renter, this timeline can be a short weekend, or maybe a few months, but most states will say that any stay over 30 days is considered “long-term”.
As a homeowner, you’re not bound to those lengthy contractual obligations. This is a huge benefit for those who are only planning on renting out a room for a particular season when rent is easily increased.
Problem tenants are easier to handle as there aren’t costly eviction processes. Homeowners are also free to change the terms of the lease agreement on a monthly basis, so long as the tenant is notified.
Although the advantages are great, and short-term rentals continuing to be in relative demand, we forget that there can be disadvantages to any good thing. From the potential months of an empty property to constant efforts for advertising to ensure future rentals to costly rental repairs. It’s good to always have a contingency plan when you’re using short-term rentals as the main form, or supplement to your current income.
For some many states, the active tourist market is a welcomed benefit to this driving popularity of short term rentals, but local governments still have issues and concerns. With that, regulations can change quickly. Most concerns are valid and consist of:
With the start of the new year behind us, it’s the ideal time for homeowners who rent out a property to get up to date with the newest requirements for short term rentals. This is very important, as there are certain actions required for owners to stay in compliance. Below are the different regulations of the towns in Summit County.
Any property owner looking to begin renting out a room, unit(s), etc. on a short-term basis (in this case, less than thirty days, consecutively, to the same customer) are required by the State of Colorado to obtain a State sales tax account number. This requirement, of course, may be contingent upon booking platforms used by customers to obtain a particular unit.
Although ordinances vary slightly between towns, be aware that the towns of Silverthorne, Breckenridge, Dillon, and Frisco created Short Term Rental regulations in conjunction with each other, and the county so regulations will be similar. License fees, tax percentages, and so forth will vary between towns. Be sure to check each individual towns unique ordinances to see exact numbers.
For all of Summit County, the property owner is required to obtain a short-term rental license. Applications typically require you to attest that the property meets all health and safety requirements (such as having functioning smoke detectors and fire extinguishers), is completely up to code, compliant with the town’s laws and that adjoining properties have been notified.
Depending on your city, the property owner may also be required to obtain a business license. Check your local government's specific ordinance to see if this applies to you.
Across Summit County, the length of short-term stay is considered less than 30 consecutive days by a single tenant. Any longer than 30 days is considered a long-term rental and violates the ordinances set by each town in Summit County.
All short-term rental accommodations are subject to State, County, and Town sales tax, as well as the Town lodging tax. For the exact percentages of each Summit County Town, make sure to check their individual government websites.
Laws and regulations make up the short-term rental market change frequently. As demand continues to grow, more and more cities will continue to take steps to protect their residents, neighborhoods, and guests alike.
Review your town’s ordinances and state laws at least annually. Revisit them often as certain regulations can change at any time.