DENVER — A state legislative committee on Wednesday decided not to forward a proposal that would have changed the tax rate for property owners who rent out their properties in the short-term to the full General Assembly for the 2019 session.
The committee met Wednesday to consider a host of proposed changes to property taxes and the Gallagher Amendment. The proposal that would require property owners who rent their spaces out via organizations like Airbnb to pay commercial property tax rates instead of residential rates was pulled after discussion and testimony, with lawmakers saying it wouldn’t have had an immediate enough impact.
The residential property tax rate in Colorado is currently 7.9 percent. The commercial rate is 29 percent. Some of Colorado's smaller towns and mountain communities support the change as a way to increase property tax revenue.
"In some mountain towns, homes never have a resident in them. The people that own them don't live in-state," said Rep. Daneya Esgar, who chairs the committee that's considering alternatives to the Gallagher Amendment.
The 1982 Gallagher Amendment has lowered property taxes in Colorado as home values have risen. Esgar says this has been especially hard for rural communities, many of which are now struggling to pay for basic services.
"The idea is some of these communities aren't necessarily getting all of the property tax dollars that they should be getting if this was an actual commercial property and it's impacting fire districts, it's impacting water districts [and] school districts," Esgar said.
But an Airbnb spokeswoman said 58 percent of hosts in Colorado use Airbnb to help afford staying in their home.
The tax rate proposal had been just one of several proposals being considered by the committee before being sent to the legislature in 2019.
Several other issues are still under consideration.