Westminster Short Term Rental Regulation: A Guide For Airbnb Hosts

What are short term rental (Airbnb, VRBO) regulations in Westminster, Colorado?

Short term rentals like Airbnb and VRBO have faced mixed regulations across cities in Colorado. As per the Westminster municipal code, short term rentals are currently not allowed within city limits1. The code does not have explicit regulations around such rentals, which technically prohibits hosts from listing on Airbnb and VRBO.

However, Westminster is starting the process to put together an official policy to regulate short term rentals in early 20222. The city conducted a survey in 2019 which found nearly two-thirds of residents wanted to allow short term rentals in some form3.

As the city crafts the policy, it may require licensing, inspection certificates, insurance coverage and charge accommodations tax much like other cities in Colorado and across the US1. For instance, Denver requires hosts to occupy the rental as a primary residence if it is a single family home4.

On forums like BiggerPockets, real estate investors debate the implications of these policy changes for existing Airbnb hosts and those looking to buy investment properties3. One investor commented “Centennial and Adams County allow for Airbnb investment properties. It will be interesting to see if Westminster follows a similar approach or regulates it further like Denver.”

Starting a Short Term Rental Business in Westminster

As of May 2023, the City of Westminster has approved regulations to allow and govern short term rentals after previously prohibiting them (1, 2). This opens up opportunities for real estate investors and hosts looking to operate short term rental properties in Westminster.However, the regulations come with licensing requirements, taxes, limitations, and penalties for violations.

As such, hosts must educate themselves and prepare accordingly before listing short term rentals in Westminster.The first step is understanding Westminster's definition of a short term rental. It covers rentals of a residential property or part of a property for less than 30 consecutive days, excluding hotels, motels, and bed & breakfasts (3).

The regulations apply to single family homes, condos, duplexes, townhouses, ADUs, and more when rented short term.Before listing a property on Airbnb, VRBO, or similar platforms, hosts must apply for and receive a short term rental license. Annual license fees will apply.

Hosts also need business and sales tax licenses, plus they must collect and remit accommodations taxes at 7.8% to the city (1, 2). Penalties can be assessed for non-compliance.Additionally, Westminster's regulations place limits around short term rentals to balance neighborhood livability with tourism. For example, only one rental party is allowed at a time with a maximum of 8 adult guests.

Plus exterior signage for short term rentals is prohibited while basic safety and responsible hosting provisions are mandated (3). Fines can be issued for violations.By understanding Westminster's approach to regulating short term rentals, hosts can properly operate within the rules and build successful Airbnb or VRBO businesses.

Reaching out to the city's short term rental office is advisable prior to getting started. Overall, Westminster is now reasonably Airbnb and short term rental friendly compared to outright bans in the past. However, due diligence around the regulations remains vital for smooth operations.

Short Term Rental Licensing Requirement in Westminster

As of January 2024, short term rentals remain prohibited in Westminster per the municipal code. However, the city has been drafting regulations with the goal of allowing and regulating short term rentals at some point in 2023.

While finalized regulations are still forthcoming, Westminster will likely require short term rental operators to obtain a business license that is specific to short term rental operations. Many other cities in Colorado and across the U.S. require such a license in order to legally operate a short term rental.

In addition to a business license, Westminster's draft regulations also propose that short term rental operators will need to pay excise taxes and apply for a sales tax license. The accommodations tax rate that would apply to short term rentals is currently 7.8%.

The licensing process for short term rentals in Westminster will likely include submitting contact information for a responsible agent, providing details on the rental unit such as location and number of bedrooms, and allowing inspections of the property. Operators may also need to provide proof of insurance.

Stay tuned for the finalized short term rental regulations expected later in 2023. Once the specifics of licensing are solidified, hosts interested in starting a short term rental business in Westminster will have a clearer path to getting approved to operate legally.

Required Documents for Westminster Short Term Rentals

As Westminster finalizes regulations to allow short term rentals, documentation requirements are still being determined. However, based on regulations in other Colorado cities like Denver, Aspen, and Breckenridge, Westminster will likely require hosts to have the following documentation:

Business License

A city business license specifically for the short term rental will probably be required. This ensures the city is aware of all active rentals. The license may need to be renewed annually for a fee.

Sales Tax License

Hosts will need to apply for a sales tax license to collect and remit sales taxes on rental revenue. This includes both city and state sales tax. Tracking software can simplify tax calculations and filings.

Proof of Insurance

Most cities mandate hosts carry insurance that specifically covers short term rentals. This protects guests and buffers hosts from major property damage or liability claims. Hosts may need to provide proof of active coverage to the city.

Inspection Certificates

Westminster may require safety inspections to obtain a rental license, like those for fire alarms, carbon monoxide detectors, and other life safety features. An inspection certificate helps ensure properties meet code. Regular re-inspections may be needed to renew licenses.

Responsible Agent Contact

Regulations will likely require identifying a responsible agent who can respond quickly to issues at the rental and provide access if necessary. Contact details like phone number and address may need to be kept current.

Good Neighbor Brochures

In tourist destinations like mountain towns, providing good neighbor brochures is common. These educate guests on rules, respecting neighbors, trash policies, parking limitations, and contact information.

Staying organized and allowing ample time for inspections, taxes, and renewals will help hosts successfully navigate Westminster's upcoming short term rental regulations when finalized.

Westminster Short Term Rental Taxes

As short term rentals become legalized in Westminster, hosts will need to pay attention to applicable taxes. The city has stated that short term rental operators will be required to apply for a business license, sales tax license, and remit accommodations tax (1).

The accommodations tax rate in Westminster is currently 7.8% of the rental rate charged to guests (4). This is a common tax that cities charge specifically on short term rental properties to help fund infrastructure, affordable housing initiatives, etc.

In addition to the accommodations tax, short term rental hosts will also need to apply for a standard Westminster sales tax license. The city's sales tax rate is 3.85%. Hosts will need to collect and remit this sales tax on the rent they earn the same as any other Westminster business (1).

Some key things for hosts to understand regarding taxes:

• Accommodations Tax: 7.8% of rental rate
• Sales Tax: 3.85% of rental rate
• Both taxes collected from guests and remitted to the city monthly
• Manage tax payments and filings through the city's Gentax online system
• Keep detailed records of taxes collected and remitted

Staying on top of licensing and tax requirements is crucial for hosts to operate legally. Failing to do so could result in penalties, fines, or prohibition from operating in Westminster. We recommend all hosts consult with a tax professional to ensure they are setup properly.

Reach out to the city finance department with any questions regarding short term rental taxes and processes in Westminster.

Colorado Wide Short Term Rental Rules

Short term rental regulations in Colorado vary widely between cities, counties, and local municipalities. The state has not enacted any overarching laws regarding short term rentals. This patchwork of local ordinances and zoning codes has created confusion among hosts looking to operate legally.

In major cities like Denver, short term rentals are allowed but face strict licensing and zoning requirements. Denver requires all hosts to obtain a short term rental license, which involves fees, inspections, neighbor notifications, and more. Listings also cannot be operated as pure investment properties - the host must reside at the home for a minimum number of days per year. Failure to comply risks fines or license revocation.

Meanwhile, smaller mountain towns like Breckenridge have enacted partial bans on short term rentals in residential zones to limit their growth. The goal is to encourage long term housing for local workers instead of transient vacation rentals. Each town takes a unique approach based on local housing needs and community input.

With no top-down guidance from the state, Colorado hosts must research a maze of local rules. There is no one-size-fits-all regulation, even within the same metro area.

However, more cities seem to be embracing short term rental licensing schemes rather than outright bans. The additional tax revenue provides an incentive, especially in popular tourist destinations. But significant regulation also deters illegal hotels while funding enforcement. Achieving this balance remains an evolving challenge across Colorado.

Does Westminster Strictly Enforce STR Rules?

As short term rentals are currently prohibited per Westminster's municipal code, there are no enforcement activities targeted specifically at short term rental operators (1, 2).

However, once regulations are in place allowing short term rentals, the city will likely enforce licensing and tax requirements.

Based on regulations in other Colorado cities, potential enforcement mechanisms Westminster could use include (3, 4):

• Requiring a business license with ability to revoke for violations
• Charging escalating fines for unlicensed rentals or tax non-compliance
• Utilizing rental platforms to identify unregistered listings
• Fielding complaints from neighbors about problem properties

Without explicit regulations today, short term rental hosts in Westminster operate in a legal gray area. Some likely list rentals illegally given market demand, as evidenced by discussions on sites like BiggerPockets (2).

Strict enforcement seems improbable currently with no clear rules to enforce.Once Westminster finalizes short term rental regulations in 2023 as planned, enforcement capabilities will expand (1).

The city could then crack down on unlicensed hosts not following the new rules. Westminster may also utilize a complaint-driven model like other cities, using neighbor reports to identify problem properties for enforcement action (4).In summary, Westminster does not strictly enforce short term rental rules today since they are prohibited.

However, enforcement capabilities will likely increase with new regulations, using mechanisms like licensing requirements, taxes, fines, and complaints to force compliance.

How to Start a Short Term Rental Business in Westminster?

Starting a profitable and legal short term rental business in Westminster requires advanced planning and preparation. Here is a step-by-step guide:

1. Research the Draft Regulations

Thoroughly read through Westminster's draft STR regulations once they are released in 2023. Make sure you understand all requirements for legal operation, taxes, responsible parties, occupancy limits, parking, etc. Take notes on key details.

2. Evaluate Your Property

Walk through your potential rental property with the regulations in mind. Can you meet all requirements like parking, responsible party access, contact posting, etc? Does your HOA allow short term rentals? Make any necessary changes before listing your property.

3. Obtain Required Licenses

Westminster will likely require both a general business license and a short term rental license. Apply for these once the approval process is opened after the 2023 regulations take effect.

4. Remit All Taxes

You will need both a sales tax license and accommodations tax ID. Set up accounts to collect, track, and regularly remit sales taxes and Westminster's 7.8% accommodations tax on bookings.

5. Create Listings and House Rules

Write enticing listings showcasing your property's best features. Clearly state house rules on parking, noise, checkout, etc. Stay organized by using listing services like Airbnb which handle booking and payments.

6. Provide Exceptional Guest Experiences

Greet guests personally when possible and quickly resolve any issues. Keep your calendar full by encouraging reviews, responding promptly, and offering competitive pricing. Westminster may limit total rental days allowed per year so track your limit.

With proper preparation, the new 2023 regulations present an exciting opportunity to operate a legal and profitable STR business in Westminster, Colorado! Let me know if you need any clarification or have additional questions.

Who to Contact in Westminster about Short Term Rental Regulations and Zoning

For short term rental questions: str@westminsterco.gov or 303-658-23421

For business license questions: licensing@westminsterco.gov or 303-658-21611

What Do Airbnb Hosts in Westminster on Reddit and Bigger Pockets Think About Local Regulations?

Westminster hosts eagerly await clear regulations in 2023 to legally and smoothly operate short term rentals. While current municipal code prohibits rentals under 30 days (1, 2), the city aims to draft an ordinance by early 2023 after extensive research and community engagement (1, 3, 4).

Hosts seem optimistic about the drafting process so far. As one BiggerPockets member noted, "I'll be interested to see which direction they go. If I had to guess, I’d say they're going to allow short-term rentals but only in your primary residence just like most cities in the Denver metro area" (3). This regulation would still allow Westminster residents to host guests while preventing investors from buying up homes solely to list on Airbnb and Vrbo.

The city has conducted resident surveys with nearly two-thirds supporting short term rental legalization (2). They also held focus groups asking for community perspectives, with one YouTube video showing constructive discussion between hosts, neighbors, and officials (4). The city planning department states they aim to strike a balance between enabling home sharing while addressing concerns like parking, trash, and neighborhood character (1).

With thorough research and engagement, Westminster seems to be taking a measured approach to crafting fair, reasonable regulations. Most hosts are likely optimistic about a 2023 ordinance that allows responsible short term rental operation. Clear rules will enable hosts to legally welcome guests and participate in Westminster's emerging sharing economy.