Denver County, Colorado Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Denver County, Colorado?

Short-term rentals like those listed on Airbnb and VRBO have become increasingly popular in Denver County, Colorado. However, there are several regulations that hosts must follow to legally operate an STR. These rules are outlined in the Denver Zoning Code, planning codes, and city ordinances.

Starting a Short-Term Rental Business in Denver County

To start an STR business in Denver, hosts must first obtain a short-term rental license from the Denver Department of Excise and Licenses. The property being rented must be the host's primary residence, meaning it is the place they live most of the year. Proof of primary residence is required, such as a driver's license or voter registration.

The STR license application is done entirely online and costs $150. Hosts must also obtain a Lodger's Tax ID from the city and pay the 10.75% lodger's tax on any rental income under 30 days. General liability insurance of at least $1 million is required as well.

Other key requirements include:

• Rentals are limited to the host's primary residence only
• Rentals cannot exceed 29 days at a time
• Only one rental contract is allowed at a time (no separate/simultaneous rentals)
• No more than 5 unrelated people can stay overnight
• A rental packet must be provided with safety info and local rules
• Working smoke and CO detectors are required

Accessory Dwelling Units (ADUs) like carriage houses can also be rented short-term if they meet the primary residence requirement. The STR license number must be clearly displayed on any online listings.

Failure to comply with the regulations can result in fines of up to $999 per violation and a revoked STR license. The city estimates there are around 3,000 active STR licenses, with many more operating illegally without one.

Zoning Restrictions and Neighborhood Concerns

Denver's zoning code allows STRs in any zone district where residential uses are permitted, as long as the other license requirements are met. However, some HOAs and apartment buildings may have their own restrictions against STRs.

Many Denver residents have expressed concerns about the growth of STRs in their neighborhoods. Common complaints include noise, parking issues, and the impact on housing affordability as more long-term rentals are converted to STRs.

In response, Denver has increased enforcement efforts and implemented a new ordinance in 2021 that prohibits booking services like Airbnb from processing reservations for unlicensed STRs. Hosts can face fines if caught renting without the proper license and tax registration.

Despite the regulations, the STR market continues to thrive in Denver. With the proper licensing and consideration for neighbors, STRs can provide a source of extra income for hosts and alternative accommodation options for visitors to the Mile High City. Prospective hosts should carefully review the rules before listing their property to ensure full compliance.

Short-Term Rental Licensing Requirement in Denver County

To legally operate a short-term rental in Denver County, hosts must obtain a short-term rental license from the Denver Department of Excise and Licenses. The property being rented must be the host's primary residence, meaning they live there for most of the year.

The STR license application is completed entirely online through the Denver Permitting and Licensing Center. Required documents include:

1. Proof of primary residence (driver's license, voter registration, etc.)
2. Proof of property ownership or a lease allowing subletting
3. Proof of $1 million liability insurance
4. A floorplan of the rental space
5. The Lodger's Tax ID number for remitting taxes

The application fee is $100 for a 1-year license. Excise and Licenses strives to conduct an initial review within 7 business days, but full approval may take longer depending on application volume. Incomplete applications are given 14 days to make corrections.

Renewal applications, which cost $100, must be submitted before the current license expires to avoid late fees:

1. 1-15 days late: 20% penalty
2. 16-30 days late: 25% penalty
3. 31-90 days late: 50% penalty

Advertising or renting an unlicensed STR can result in fines of $150 for the first violation, $500 for the second, and $999 for the third and subsequent violations. The city may also file a court case seeking an injunction and further penalties.

Providing false information on the license application is even more serious. Several Denver hosts have been charged with felonies for claiming a property was their primary residence when it was not. This can be punishable by 2-6 years in prison and fines up to $500,000.

Denver takes STR compliance seriously, with staff regularly inspecting properties and an estimated 90% of listings now properly licensed. However, with the growth of the STR market, many residents have raised concerns about the impact on neighborhoods and housing affordability. The regulations aim to strike a balance between allowing STRs and maintaining community stability.

Required Documents for Denver County Short-Term Rentals

To apply for a short-term rental license in Denver County, you must submit several documents to prove your eligibility and compliance with local regulations. The Denver Department of Excise and Licenses requires the following:

Proof of Primary Residence: You must provide documents showing the rental property is your primary residence, where you live most of the year. Acceptable forms include:

1. A valid Colorado driver's license or Colorado ID card
2. Voter registration
3. Motor vehicle registration
4. Tax documents
5. Utility bills

Proof of Property Ownership or Permission to Sublet: If you own the property, you must submit a deed or property tax statement. If you rent the property, you must provide a lease agreement that explicitly allows you to sublet or use the property as a short-term rental.

Proof of Insurance: You must have liability insurance coverage of at least $1 million that covers the short-term rental use of your property. This can be through your own insurance policy or provided by the rental platform you use, such as Airbnb.

Floor Plan: You must submit a floor plan of your short-term rental property showing all rooms and spaces that guests can access. This helps ensure compliance with occupancy limits and safety requirements.

Lodger's Tax ID Number: Before applying for your license, you must register for a Lodger's Tax ID with the Denver Department of Finance. This is required to remit the 10.75% Lodger's Tax on any short-term rental income. You will provide your Lodger's Tax ID number on your license application.

These documents must be complete, legible, and show your full name and address that matches the short-term rental property. Partial documents like screenshots are not accepted. Once you have gathered all required documents, you can submit your short-term rental license application online through the Denver Permitting and Licensing Center.

Failing to obtain a license before operating a short-term rental in Denver can result in fines up to $999 per violation and legal action from the city. By carefully following the documentation requirements and application process, you can ensure your short-term rental business operates legally and successfully in Denver County.

Denver County Short-Term Rental Taxes

When operating a short-term rental in Denver County, several taxes apply that hosts must collect and remit to the proper authorities. Understanding these taxes is crucial for compliance and budgeting. The main taxes for Denver STRs are:

1. Denver Lodger's Tax: Denver charges a 10.75% Lodger's Tax on the listing price, including any cleaning fees and guest fees, for stays of 29 nights or less. This tax is paid directly to the City and County of Denver through the host's Lodger's Tax ID.
2. Colorado Sales Tax: The state sales tax is 2.9% of the listing price, including cleaning fees, for reservations of 29 nights or less. This tax is remitted to the Colorado Department of Revenue.
3. County Lodging Tax: In addition to the Denver Lodger's Tax, Denver County charges a lodging tax typically ranging from 0.9% to 2% of the listing price and cleaning fees for stays under 30 nights.
4. Local Marketing District Tax: Some areas within Denver have a local marketing district tax, usually between 1.4% and 4% of the total reservation cost, to fund tourism promotion efforts.
5. Metropolitan District Tax: Certain metropolitan districts may charge an additional tax, typically 0.5% to 5.5%, on short-term rental revenue.

It's important to note that these tax rates and rules can change frequently, so hosts should regularly check with the Denver Department of Finance and Colorado Department of Revenue for the most up-to-date information.

Airbnb and some other platforms collect and remit certain taxes on behalf of hosts, like the Colorado state sales tax and Denver Lodger's Tax. However, hosts are ultimately responsible for ensuring all required taxes are paid.

Short-Term Rental Tax Deductions

To offset some of the tax burden, the IRS allows short-term rental hosts to deduct many of their business expenses, such as:

1. Mortgage interest and property taxes
2. Rental insurance and property management fees
3. Cleaning, maintenance, and repair costs
4. Utility payments and supplies
5. Advertising and booking fees
6. Depreciation of furniture and equipment

Hosts should keep detailed records and receipts for all rental-related expenses. Consult with a tax professional to ensure you're taking advantage of all available deductions and complying with federal and state tax laws.

By understanding the applicable taxes and allowable deductions, short-term rental operators in Denver can better manage their business finances and stay compliant with local regulations. With the proper planning and attention to detail, an STR can be a profitable venture in the Mile High City.

Colorado Wide Short-Term Rental Rules

In the state of Colorado, there are currently no overarching statewide laws or regulations that specifically govern short-term rentals. Instead, the rules and requirements for operating an STR are primarily determined at the local level by individual counties and municipalities.

This means that the specific ordinances, permits, and licenses required to legally run an Airbnb or other short-term rental can vary significantly depending on where the property is located within Colorado. Each city and county has the authority to create its own set of STR regulations based on factors like zoning, housing availability, and community concerns.

While a statewide bill was introduced in 2020 aiming to define STRs uniformly across Colorado, it has not yet been signed into law. The proposed legislation characterizes an STR as a residential property rented for stays of less than 30 consecutive days to transient guests, with the owner occupying the property for fewer than 30 days per year.

Despite the lack of statewide oversight, there are a few general requirements that apply broadly to STRs in Colorado:

1. Business Registration: STR operators must register their rental business with the Colorado Secretary of State, which can be done online for a small fee ($20-$50).
2. Sales Tax License: Hosts are required to obtain a sales tax license from the Colorado Department of Revenue in order to collect and remit both state (2.9%) and local sales taxes on STR income.
3. Tax Compliance: STR operators are responsible for collecting and paying all applicable state and local taxes, including sales tax and lodging tax. The exact tax rates and filing procedures depend on the property's location.

Beyond these basic administrative requirements, the bulk of STR regulation happens at the local government level. Colorado counties and cities have taken varying approaches to managing the growth of short-term rentals, from caps on the number of licenses to restrictions on which zones allow STRs.

It's crucial for prospective and current STR hosts in Colorado to research and comply with all rules specific to their rental's location. Failure to obtain required permits or follow operational guidelines can result in fines, license revocation, and legal issues. When in doubt, owners should contact their local city and county agencies for the most up-to-date and comprehensive information on short-term rental requirements in their area.

Does Denver County Strictly Enforce STR Rules?

Denver County has some of the strictest short-term rental regulations in Colorado, and the city is known for its active enforcement efforts. The primary residence requirement, in particular, aims to limit the number of investor-owned STRs and preserve housing stock for long-term residents.

However, despite these rules, many hosts continue to operate STRs in Denver without proper licensing or in violation of the primary residence rule. On forums like BiggerPockets and Reddit, hosts express frustration with the compliance requirements and share stories of operating under the radar.

One common tactic is to falsely claim a property as a primary residence, even when the owner does not live there most of the year. Some hosts have faced felony charges for lying on their license applications, but others continue to skirt the rules.

The city has taken steps to crack down on illegal STRs, such as implementing a $1,000 fine for booking platforms that process reservations for unlicensed properties. This has led to increased compliance, with the city reporting that around 90% of listings are now properly licensed.

However, many Denver residents feel that enforcement is still not stringent enough. On Reddit, locals share stories of entire apartment buildings being used as de facto hotels, with a revolving door of short-term guests. Others complain about unlicensed STRs causing noise, parking, and safety issues in their neighborhoods.

Compared to other Colorado cities, Denver is definitely less Airbnb-friendly. While mountain towns like Breckenridge and Steamboat Springs have embraced STRs as a key part of their tourism economy, Denver has prioritized protecting its limited housing supply for residents.

That said, the demand for STRs in Denver remains high, and the financial incentives for hosts are strong. As long as there is money to be made, it seems likely that some hosts will continue to operate in violation of the rules, even as the city works to improve its enforcement efforts. For now, Denver remains a challenging and often contentious market for short-term rentals.

How to Start a Short-Term Rental Business in Denver County

Starting a short-term rental business in Denver County requires careful planning and adherence to local regulations. Follow these steps to legally operate your STR:

Verify your property qualifies:

• The rental property must be your primary residence, where you live most of the year
• If you rent the property, your lease must allow subletting for STRs
• Accessory Dwelling Units (ADUs) may qualify if they are your primary residence
• Thoroughly review Denver's primary residence requirements before proceeding. You can only have one primary residence for STR purposes.

Register your business:

• Choose a business structure (sole proprietorship, LLC, etc.)
• Register your business with the Colorado Secretary of State
• Obtain a federal Employer Identification Number (EIN) from the IRS if forming an LLC or corporation
• Consult with a business attorney or accountant to determine the best entity type for your situation.

Obtain a Lodger's Tax ID:

• Register for a Lodger's Tax ID with the Denver Department of Finance
• You will need this ID number to collect and remit the required 10.75% Lodger's Tax on STR income
• Keep detailed records of all STR revenue and Lodger's Tax collected for easier reporting and remittance.

Apply for a Short-Term Rental License:

• Gather required documents, including proof of primary residence, proof of property ownership or lease allowing subletting, a floorplan of the STR space, and your Lodger's Tax ID
• Complete the STR license application online through the Denver Permitting and Licensing Center
• Pay the $100 application fee
• Licenses must be renewed annually, and the renewal fee is $100
• Thoroughly review your application for accuracy and completeness before submitting to avoid delays in processing.

Prepare your property:

• Ensure your STR meets all safety requirements, including working smoke and carbon monoxide detectors
• Provide a rental packet with important information for guests, such as emergency contacts and local rules
• Consider hiring a professional cleaning service between guest stays
• High-quality photos and a well-written description can help your listing stand out on STR platforms.

List your property:

1. Create a listing on popular STR platforms like Airbnb and VRBO
2. Clearly display your Denver STR license number on your listing
3. Set competitive rates based on comparable properties in your area
4. Utilize dynamic pricing tools to automatically adjust rates based on demand and maximize revenue.

Manage your STR business:

1. Communicate promptly with guests before, during, and after their stay
2. Maintain accurate records of all bookings, revenue, and expenses for tax purposes
3. Stay up-to-date on any changes to Denver's STR regulations
4. Consider using STR management software or hiring a property manager to streamline operations and save time.

By following these steps and prioritizing compliance with Denver's STR rules, you can successfully launch and operate your short-term rental business in Denver County. Remember to be a respectful neighbor and prioritize guest safety to ensure a positive experience for all involved.

Who to Contact in Denver County about Short-Term Rental Regulations and Zoning?

For questions about short-term rental regulations, licensing, and zoning in Denver County, you can contact the following city departments and resources:

Denver Department of Excise and Licenses

• Website: denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/Business-Licensing
• Email: licenses@denvergov.org
• Phone: 311 (within Denver) or 720-913-1311

The Department of Excise and Licenses handles all matters related to short-term rental licensing, including applications, renewals, and compliance. Their website has comprehensive information on the licensing process, requirements, fees, and more.

Denver Community Planning and Development

• Website: denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/Community-Planning-and-Development
• Email: zoningreview@denvergov.org
• Phone: 720-865-2915

For questions related to zoning, land use, and building codes that may impact short-term rentals, contact Denver Community Planning and Development. They can provide guidance on whether a property is zoned for STR use.

Denver Department of Finance - Treasury Division

• Website: denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/Department-of-Finance/Our-Divisions/Treasury-Division
• Email: treasinfo@denvergov.org
• Phone: 720-913-9300

The Treasury Division handles tax collection for short-term rentals, including the Lodger's Tax. Contact them for questions about registering for tax accounts, filing returns, and remitting taxes.

In addition to these official city resources, connecting with the local host community can provide valuable insights and support:

• Denver Short-Term Rental Alliance: A non-profit trade association representing STR owners and managers in Denver. They advocate for fair regulations and provide educational resources.
• Airbnb Denver Host Forum: An online forum for Denver hosts to ask questions, share experiences, and discuss local STR topics.
• Denver Short-Term Rental Hosts Facebook Group: A private Facebook group for Denver hosts to network and stay up-to-date on local regulations and best practices.

By utilizing these official contacts and community resources, aspiring and current short-term rental hosts in Denver can navigate the regulatory landscape and connect with others for support. It's important to communicate proactively with city departments to ensure compliance with all applicable rules.

What Do Airbnb Hosts in Denver County on Reddit and Bigger Pockets Think about Local Regulations?

Discussions on forums like Reddit and BiggerPockets reveal a range of opinions from Denver County Airbnb hosts about the area's short-term rental regulations. While some express frustration with the strict enforcement, others see the rules as necessary and navigable. Here's a snapshot of host experiences and perspectives:

On Reddit, a host with 10 years of experience managing over 100 listings in Denver commented that the city is "insanely strict about enforcing regulations." They advised others to research the case of Brian Snow, a Denver host charged with felonies for falsely claiming properties as his primary residence. However, the host also expressed willingness to continue helping others navigate the system.

In a BiggerPockets forum, a new host sought advice on Denver's STR regulations, acknowledging they are "somewhat strict." Responses emphasized the importance of carefully researching and complying with local rules before starting an Airbnb business in the area.

Another BiggerPockets thread highlighted the strong demand for STRs in Denver, with one host's unit near Sherrelwood booked almost solid for the summer. The host shared tips for analyzing a property's STR potential but did not delve into regulatory issues.

However, a different BiggerPockets post revealed the challenges of operating in Denver, with the city "hellbent on taking STR license." The host, who had been operating without incident for years, expressed frustration with the annual license renewal process and the city's enforcement efforts.

On the Denver subreddit, hosts discussed a proposed bill to tax STRs at a higher rate. Some shared personal experiences of shifting back to hotels due to the rising costs and "massive fuckery" of the STR market. Others expressed support for the bill, arguing that STRs have become a "blight" on communities and that hosts should pay commercial tax rates.

Overall, the online discussions paint a picture of a challenging but potentially lucrative STR market in Denver County. Hosts emphasize the importance of thoroughly understanding and complying with local regulations, which are actively enforced. While some express frustration with the rules, others see them as necessary to mitigate the negative impacts of STRs on housing affordability and neighborhood stability. As one Redditor put it, "Tourism existed in Colorado way before Airbnb ever existed."

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.