Santa Fe Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in Santa Fe, New Mexico?

Santa Fe, the capital of New Mexico, has implemented various regulations on short-term vacation rentals like Airbnb and VRBO in recent years. These rules, found in the city's ordinances and zoning codes, aim to balance the economic benefits of STRs with preserving the character and quality of life in residential neighborhoods. Here's an overview of the key regulations and requirements for operating a short-term rental in Santa Fe.

Starting a Short-Term Rental Business in Santa Fe

Property owners must first obtain a Short-Term Rental Permit from the city's Land Use Department to legally operate a short-term rental in Santa Fe. This requirement applies to all residential properties rented for periods of less than 30 consecutive days.

The Short-Term Rental Permit application process involves several steps:

• Submit a completed application form, proof of property ownership, a site plan, a floor plan, and proof of liability insurance.
• Pass a home safety inspection to ensure compliance with building and fire codes.
• Obtain a Business License and register for Lodgers' Tax collection.
• Pay the permit application fee of $100 and the annual permit fee of $290.

As of January 2021, Santa Fe limits the total number of Short-Term Rental Permits in residential zoning districts to 1,000 citywide. Permits are issued on a first-come, first-served basis. Once the cap is reached, new applications are placed on a waiting list.

The city also implemented proximity requirements for STRs in residential areas. Vacation rentals must be located at least 50 feet away from another permitted STR property. No more than 25% of the total units in multi-unit buildings may be used as STRs.

Accessory dwelling units (ADUs), such as casitas or guesthouses, may be permitted as STRs if the property owner lives on-site in either the primary residence or the ADU. Only one STR permit is allowed per property owner.

It's important to note that properties in non-residential zoning districts, like the downtown area, are not subject to the permit cap or proximity rules. However, they still must register with the city and obtain a Business License.

Failure to comply with Santa Fe's STR regulations can result in fines of up to $500 per violation per day and potential revocation of the rental permit. The city has increased its enforcement efforts in recent years, including hiring additional code compliance officers and contracting with a third-party monitoring service to identify illegal listings.

Before investing in a short-term rental property in Santa Fe, it's crucial to research the specific zoning requirements and ensure the property is eligible for a permit. With the current cap on residential permits, securing the right to operate an STR in some areas may be challenging. Consulting with local officials and experienced STR managers can help navigate the complex regulatory landscape.

Short-Term Rental Licensing Requirements in Santa Fe

To legally launch and operate a short-term rental business in Santa Fe, property owners must obtain the appropriate permit or registration from the city's Land Use Department, depending on the property's zoning.

For STRs in residential zoning districts, a Short-Term Rental Permit is required. The application process involves:

1. Submitting a completed application form, proof of property ownership, a site plan, a floor plan, and proof of liability insurance.
2. Passing a safety inspection to ensure compliance with building and fire codes.
3. Paying the $100 permit application fee and the annual permit fee of $290.

Residential STR permits are subject to the citywide cap of 1,000 and the 50-foot proximity rule. Permits are issued to the owner as a natural person and cannot be transferred with the sale of the property.

For STRs in non-residential zoning districts, a Short-Term Rental Registration is required instead of a permit. The registration process is similar to the permitting process, but without the cap and proximity restrictions. The same application and annual fees apply.

In addition to the STR permit or registration, all short-term rental operators in Santa Fe must also:

1. Obtain a Business License from the city's Business Registration Office. The initial application fee is $35, with an annual renewal fee of $35.
2. Register with the New Mexico Taxation and Revenue Department for a Combined Reporting System (CRS) number to collect and remit gross receipts taxes.

Accessory dwelling units (ADUs), such as casitas or guesthouses, may be permitted as STRs if the property owner lives on-site in either the primary residence or the ADU. Only one STR permit is allowed per property owner.

It's important to note that operating a short-term rental without the proper permit or registration is a violation of city ordinance and can result in significant fines and legal consequences. The city has increased its enforcement efforts in recent years to ensure compliance with STR regulations.

Prospective short-term rental hosts in Santa Fe should carefully review all licensing requirements and consult with the city's Land Use Department before beginning the application process. Staying informed about any changes to the regulations and maintaining all necessary permits and licenses is crucial for operating a successful and compliant STR business in the city.

Required Documents for Santa Fe Short-Term Rentals

Property owners must obtain the necessary permits and licenses from the city's Land Use Department to legally operate a short-term rental in Santa Fe. As part of the application process, several key documents are required.

Short-Term Rental Permit Application

The first step is to complete the Short-Term Rental Permit Application, which can be found on the city's website. This application requires detailed information about the property, including the address, owner contact information, and the type of rental being registered (residential or non-residential).

Proof of Ownership

Applicants must provide proof of ownership for the property being registered. Acceptable documents include a copy of the warranty deed, property tax bill, or other official record demonstrating ownership.

Site Plan and Floor Plan

A site plan and floor plan of the rental property are required as part of the application. The site plan should show the location of all buildings on the property and the designated parking spaces. The floor plan must depict all rooms within the dwelling, labeled by room type.

Proof of Insurance

Short-term rental operators in Santa Fe must maintain liability insurance coverage. A copy of the insurance declaration page or certificate of insurance must be submitted with the application.

Local Contact Person Designation

As part of the application, owners must designate a local contact person who is available 24/7 to respond to any issues or complaints within one hour. The contact person's name, phone number, and email address must be provided.

Business Registration and Tax ID

In addition to the Short-Term Rental Permit, operators must also obtain a Business Registration (Business License) from the city. This requires registering with the New Mexico Taxation and Revenue Department for a Combined Reporting System (CRS) number to collect and remit applicable taxes.

Good Neighbor Brochure Acknowledgement

Owners must sign and submit an acknowledgement form confirming they have received and read the city's Good Neighbor Brochure, which outlines rules and expectations for short-term rentals.

Application Fees

The following non-refundable fees must be submitted with the Short-Term Rental Permit Application:

1. Application Fee: $100
2. Safety Inspection Fee: $75
3. Permit Fee: $290 (residential) or $325 (non-residential)
4. Business Registration Fee: $35

Navigating the various document requirements can be complex, so it's important for prospective short-term rental operators to carefully review the city's application checklist and consult with the Land Use Department if needed. Failure to provide all required documents can delay the approval process and prevent the issuance of a Short-Term Rental Permit.

By properly preparing and submitting the necessary paperwork, short-term rental hosts in Santa Fe can ensure they fully comply with local regulations and avoid potential fines or legal consequences. Staying organized and keeping all required documents up-to-date is key to running a successful and compliant short-term rental business in the city.

Santa Fe Short-Term Rental Taxes

Short-term rental operators in Santa Fe are subject to several taxes at the city, county, and state levels. It's crucial for hosts to understand and comply with these tax obligations to avoid penalties and maintain their legal standing.

City of Santa Fe Lodgers' Tax

The City of Santa Fe imposes a Lodgers' Tax on all short-term rentals, which includes a 5% occupancy tax and a 2% convention center fee, for a total of 7%. This tax applies to all rentals of less than 30 consecutive days.

Hosts must collect the Lodgers' Tax from their guests and remit it to the city on a monthly basis, even if they had no rental activity during that month. Late filings or failure to pay the tax can result in penalties and interest charges.

Santa Fe County Lodgers' Tax

In addition to the city tax, Santa Fe County also levies a 5% Lodgers' Tax on short-term rentals in unincorporated areas of the county. This tax went into effect in March 2023 and applies to all rentals of less than 30 consecutive days.

County STR operators must register with the Santa Fe County Treasurer's Office to obtain a Lodgers' Tax License and file monthly tax returns. The tax is due on or before the 25th day of the month following the reporting period.

New Mexico Gross Receipts Tax

At the state level, short-term rental income is subject to New Mexico's Gross Receipts Tax (GRT). The statewide GRT rate is 5.125%, but the total rate varies by location due to additional county and municipal taxes.

In the City of Santa Fe, the total GRT rate is currently 8.4375%, which includes the state, county, and city portions of the tax. STR hosts must register with the New Mexico Taxation and Revenue Department to obtain a Combined Reporting System (CRS) number and file periodic GRT returns.

Occupancy Tax Exemptions

Certain guests, such as federal government employees on official business, may be exempt from paying the Lodgers' Tax in Santa Fe. Hosts should obtain the proper documentation for any exempt stays and maintain accurate records.

Tax Collection by Booking Platforms

Some short-term rental platforms, like Airbnb and Vrbo, collect and remit the City of Santa Fe Lodgers' Tax and the New Mexico Gross Receipts Tax on behalf of their hosts. However, hosts are still responsible for registering with the tax authorities and filing all applicable returns, even if they had no bookings outside of these platforms.

As of June 2023, booking platforms do not collect the Santa Fe County Lodgers' Tax. County STR operators must collect and remit this tax themselves, regardless of how the booking was made.

Compliance and Recordkeeping

To ensure compliance with all tax requirements, short-term rental hosts in Santa Fe should maintain detailed records of their rental income, occupancy, and taxes collected. The city, county, and state may request access to these records for auditing purposes.

Failure to comply with the Lodgers' Tax, Gross Receipts Tax, or other tax obligations can result in significant fines, penalties, and even the revocation of an STR permit. Hosts should stay informed about any changes to the tax rates or regulations and promptly address any issues that arise.

Given the complexity of the tax landscape, many short-term rental operators in Santa Fe choose to work with professional tax advisors or use specialized STR compliance software to manage their tax filings and payments. By understanding and fulfilling their tax responsibilities, hosts can confidently operate their rentals and contribute to the local economy.

New Mexico Wide Short-Term Rental Rules

While individual cities and counties in New Mexico have the authority to impose their own regulations on short-term rentals (STRs), some statewide rules and definitions apply uniformly across the Land of Enchantment.

According to the New Mexico Lodgers' Tax Act, a "short-term rental" is a furnished accommodation for less than 30 consecutive days. This broad definition encompasses a wide range of property types, from single-family homes and condos to apartments and casitas.

At the state level, New Mexico does not have a blanket ban on short-term rentals. However, the state does allow local jurisdictions to enact their own ordinances regulating STRs, which has led to a patchwork of rules across different cities and counties. These local regulations can cover issues such as zoning restrictions, permitting requirements, occupancy limits, parking rules, and noise restrictions.

One notable statewide requirement for short-term rental operators in New Mexico is the collection and remittance of lodgers' tax. The state imposes a 5% lodgers' tax on all short-term rental accommodations, in addition to any local lodgers' taxes levied by cities or counties. STR hosts are responsible for registering with the New Mexico Taxation and Revenue Department, collecting the tax from guests, and filing regular lodgers' tax returns.

Failure to comply with the lodgers' tax requirements can result in significant penalties and interest charges. The state may also pursue legal action against non-compliant STR operators, including liens on the rental property.

In terms of safety requirements, New Mexico has not adopted any statewide regulations specifically for short-term rentals. However, all rental properties must comply with the state's building codes and fire safety standards. Local jurisdictions may impose additional safety requirements, such as smoke and carbon monoxide detectors, fire extinguishers, and emergency evacuation plans.

It's important to note that while New Mexico has established some broad parameters for short-term rentals, the specific rules and regulations can vary significantly from one location to the next. Hosts must carefully research and comply with all applicable local ordinances in addition to the statewide lodgers' tax requirements.

As the short-term rental industry continues to evolve, it's likely that New Mexico's regulatory landscape will also continue to shift and adapt. Hosts should stay informed about any changes to state or local laws that could impact their ability to operate legally and successfully in the Land of Enchantment. Consulting with local officials, experienced STR managers, and legal professionals can help navigate the complex and ever-changing world of short-term rental regulations in New Mexico.

Does Santa Fe Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and BiggerPockets, it appears that Santa Fe takes a fairly strict approach to enforcing short-term rental regulations compared to some other cities in New Mexico. The city has dedicated staff in the Land Use Department who actively monitor and investigate potential violations of the STR ordinance.

Several Reddit users have reported receiving violation notices and fines for operating unpermitted short-term rentals in Santa Fe. One host shared their experience of being caught and fined for running an illegal STR, noting that the city's enforcement is "no joke." They advised other hosts to carefully weigh the risks before attempting to skirt the rules.

On BiggerPockets, a real estate investor warned others about the challenges of operating a short-term rental in Santa Fe, stating that the city has "strict regulations" and is "cracking down" on unpermitted STRs. They recommended thoroughly researching the requirements and going through the proper permitting process to avoid legal issues.

Compared to Albuquerque, which only recently started regulating short-term rentals, Santa Fe has a longer history of oversight and enforcement. The city first implemented STR regulations in 2008 and has continued to refine its rules over the years in response to community concerns about housing affordability and neighborhood character.

However, this doesn't mean that it's impossible to operate a successful short-term rental in Santa Fe. Hosts who follow the rules, obtain the necessary permits, and comply with all regulations can still thrive in the city's lucrative tourism market. But those who try to fly under the radar or ignore the ordinance face significant risks.

In fact, some Santa Fe hosts on Reddit argue that the city's enforcement actually benefits rule-abiding STR operators. The regulations help level the playing field and reduce unfair competition for legitimate permit holders by weeding out illegal and non-compliant rentals.

Overall, based on the experiences shared by hosts on Reddit and BiggerPockets, Santa Fe appears to be less "Airbnb friendly" than some other New Mexico cities in terms of its regulatory approach. The city's proactive enforcement efforts and penalties for violations create a more challenging environment for hosts who don't play by the rules.

While some may still attempt to operate illegally, the consensus among experienced investors is that the risks and consequences outweigh any potential rewards. For those serious about running an above-board STR business in Santa Fe, obtaining the proper permits and strictly adhering to all city requirements is absolutely essential.

How to Start a Short-Term Rental Business in Santa Fe

Starting a short-term rental business in Santa Fe requires careful planning and adherence to local regulations. Follow these steps to get your venture off the ground:

1. Research zoning laws and regulations: Familiarize yourself with Santa Fe's short-term rental ordinances and zoning restrictions. Determine if your property is located in a residential or non-residential zone, as this will impact the type of permit or registration required. Consult the city's Short-Term Rental Office for guidance.
2. Obtain necessary permits and licenses: Apply for the appropriate permit or registration based on your property's zoning. For residential properties, you'll need a Short-Term Rental Permit. For non-residential properties, a Short-Term Rental Registration is required. Submit the application form, proof of ownership, site plan, floor plan, and proof of liability insurance. Pay the applicable fees, which include a $100 application fee and a $290 annual permit or registration fee.
3. Pass a safety inspection: Schedule and pass a safety inspection to ensure your property complies with building and fire codes. Make any necessary improvements or repairs to meet the requirements.
4. Obtain a business license: Apply for a Business License from the City of Santa Fe. This is a separate requirement from the Short-Term Rental Permit or Registration. Pay the $35 initial application fee and annual renewal fee.
5. Register with tax authorities: Obtain a Combined Reporting System (CRS) number from the New Mexico Taxation and Revenue Department to collect and remit gross receipts taxes. Register with the City of Santa Fe to collect and remit lodgers' tax on your short-term rental income.
6. Prepare your property: Ensure your rental property is clean, well-maintained, and equipped with all necessary amenities to provide a great guest experience. Consider hiring a professional cleaning service and investing in high-quality furnishings.
7. Create a compelling listing: Take high-quality photos of your property and craft an engaging description that highlights its unique features and location. Be transparent about any rules or restrictions, and set competitive rates based on the local market.
8. Choose a booking platform:List your property on popular short-term rental platforms like Airbnb and Vrbo. Familiarize yourself with each platform's policies and fees, and maintain an active presence to respond to inquiries and manage bookings.
9. Implement a guest screening process: Protect your investment by thoroughly screening potential guests. Establish clear house rules and communicate expectations upfront to minimize the risk of damage or disruptive behavior.
10. Arrange for property management: Decide whether you'll manage the property yourself or hire a professional property management company. If self-managing, be prepared to handle bookings, guest communication, cleaning, and maintenance tasks. Designate a local contact person who can respond to issues within one hour.
11. Comply with ongoing requirements: Keep your Short-Term Rental Permit or Registration and Business License current by renewing them annually. Maintain accurate records of your rental income and occupancy for tax purposes. Stay informed about any changes to Santa Fe's short-term rental regulations and adapt your business practices accordingly.

By following these steps and prioritizing compliance with local laws, you can launch a successful short-term rental business in Santa Fe. Remember to provide exceptional guest experiences and be a responsible member of the community to ensure the long-term viability of your venture.

Who to Contact in Santa Fe about Short-Term Rental Regulations and Zoning?

If you have questions or need more information about short-term rental regulations and zoning in Santa Fe, there are several city and county departments available to assist you.

For inquiries related to short-term rental permits, registrations, and general regulations within the City of Santa Fe, contact the city's Short-Term Rental Office:

Phone: 505-955-6336
Email: shorttermrental@santafenm.gov

The Short-Term Rental Office is part of the city's Land Use Department and can provide guidance on the permitting process, application requirements, and compliance with the city's short-term rental ordinance.

For questions about zoning and land use regulations in the City of Santa Fe, reach out to the Planning Division of the Land Use Department:

Phone: 505-955-6631
Email: planning@santafenm.gov

The Planning Division can help you determine if a property is eligible for short-term rental use based on its zoning designation and any applicable overlay districts or development plans.

If your property is located in unincorporated areas of Santa Fe County, contact the county's Growth Management Department for information on short-term rental regulations and zoning:

Phone: 505-986-6225
Email: growthmanagement@santafecountynm.gov

The Growth Management Department oversees the county's short-term rental ordinance, which went into effect in November 2022. They can assist with registration and answer questions about the county's STR rules.

For general inquiries or to report potential violations of short-term rental regulations, you can also contact the Santa Fe County Short-Term Rental Office:

Phone: 505-955-4663
Email: shorttermrental@santafecountynm.gov

This office works in conjunction with the Growth Management Department to administer and enforce the county's short-term rental program.

Finally, for questions about state-level requirements for short-term rentals, such as lodgers' tax collection and remittance, contact the New Mexico Taxation and Revenue Department:

Phone: 505-827-0700
Website: tax.newmexico.gov

The Taxation and Revenue Department can provide guidance on registering for a Combined Reporting System (CRS) number and complying with state tax obligations for short-term rental operators.

By reaching out to the appropriate city, county, or state department, you can get the information and support you need to understand and comply with Santa Fe's short-term rental regulations. These agencies are generally very responsive and helpful in guiding property owners and managers through the various requirements and processes.

What Do Airbnb Hosts in Santa Fe on Reddit and Bigger Pockets Think about Local Regulations?

Based on discussions in online forums like Reddit and BiggerPockets, it appears that short-term rental hosts in Santa Fe have mixed feelings about the city's regulations.

Some hosts appreciate the city's efforts to balance the economic benefits of vacation rentals with the preservation of neighborhood character and housing affordability. They see the permitting process and operational requirements as reasonable steps to ensure responsible hosting.

For example, one Reddit user shared their experience operating a permitted short-term rental in Santa Fe. They noted that as long as they followed the rules, maintained the property well, and were respectful of neighbors, they had no issues with the city. The host felt the regulations helped weed out "party houses" and irresponsible operators.

However, other hosts express frustration with what they perceive as overly burdensome regulations and high fees. On BiggerPockets, several investors have complained about the $900 annual permit fee for residential short-term rentals, which they feel cuts into their profit margins. Some also have issues with the city's occupancy limits and parking restrictions.

There is also concern among hosts about the new 1,000 permit cap on residential short-term rentals that went into effect in January 2021. Those who were unable to secure a permit before the cap was reached worry about the future viability of their rental businesses.

On Reddit, one host lamented that they had invested significant money in renovating a property for short-term rental use, only to be waitlisted for a permit due to the cap. They felt the city had changed the rules midstream, leaving them in a difficult financial position.

Despite these challenges, many hosts on both platforms seem committed to making their short-term rentals work within the regulatory framework. They stress the importance of thoroughly researching the local requirements, running the numbers carefully, and being prepared to adapt as policies evolve.

Some hosts have found creative ways to navigate the permit cap, such as focusing on long-term rentals during the off-season or exploring alternative arrangements like homesharing. Others emphasize providing exceptional guest experiences and maintaining positive relationships with neighbors to avoid complaints and enforcement issues.

Overall, while opinions vary, there seems to be a recognition among Santa Fe hosts on Reddit and BiggerPockets that the city's short-term rental regulations, while imperfect, are likely here to stay. Successful operators will need to find ways to thrive within the rules while advocating for policies that balance the needs of all stakeholders.

Disclaimer: While we here at BNBCalc strive to keep all of our city 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 city 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.