HB26-1036 Local Taxes on Vacant Residential Property

Bill Summary

HB26-1036 authorizes counties and municipalities, after voter approval under TABOR (Colorado’s Taxpayer’s Bill of Rights), to create new taxes on “vacant” residential units or properties.

The bill allows two different tools: an excise tax (a tax based on characteristics of a unit) and an additional ad valorem property tax (an extra property tax on top of existing property taxes) through a new classification for “vacant residential property.” It also allows multiple local governments to form a new “local housing tax authority” to coordinate elections and to levy, collect, and enforce these taxes across participating jurisdictions.

• Defines a “vacant residential unit/property” as unoccupied and not used as a residence for a “specified amount of time” set by the taxing county, municipality, or authority.
• Excludes short-term rentals, including units that are licensed as short-term rentals or “available” for short-term stays.
• Requires the county or municipality to collect, administer, and enforce the excise tax itself (the Department of Revenue does not do it).
• States a county assessor has no duty to implement the taxes, but may assist at the assessor’s discretion, including through an agreement that provides compensation.
• Limits revenue use to “affordable, attainable, or workforce housing,” as defined by the county or municipality.

Position: Strongly Oppose

Principle: Colorado does not need a new tax category that lets government penalize lawful property ownership based on a definition it can change later.

We are a local-control state in many ways, and that is usually a good thing. But taxes are different. Once the state creates a new tax tool, it will be used, and it will spread. The title says “vacant.” The fine print lets government decide what “vacant” means and then send the bill.

Why I Am Taking This Position

First, this bill normalizes the idea that we can tax our way into affordability. It creates new excise taxes and new, additional property taxes. Governments should live within their means and make priorities in the existing budget process, with clear tradeoffs and accountability.

Second, the bill leaves the most important term open-ended. “Vacant” is whatever a county, municipality, or local housing tax authority says it is, based on a “specified amount of time” that the taxing government sets. That is the whole ballgame. If the timeframe is short, a family can be hit during normal life events and transitions. Government should not be in the business of timing your life and charging you for it.

Third, it grows bureaucracy in a permanent way. The bill authorizes local governments to create a separate legal entity, a “local housing tax authority,” with a board, rulemaking powers, enforcement duties, and the ability to issue bonds or notes payable from authority revenues. If your plan requires a brand-new authority with bonding power, you are building an institution, not solving a problem.

Fourth, the bill is clear that the Department of Revenue will not administer the excise tax. Local governments must collect, administer, and enforce it themselves. That means new systems, new staff time, classification disputes, and more red tape. The bill also says assessors have “no duty” to implement it, while still inviting optional assessor involvement through compensated agreements. Either way, the workload and the cost land on the public.

Finally, the revenue is restricted to “affordable, attainable, or workforce housing,” but the bill leaves those terms to be defined locally. Voters would be asked to approve a new tax where key definitions can be written after the fact.

One dry quip, because it fits: when the solution is always a new tax, the problem is rarely a shortage of authority.

Call to Action – What You Should Do!

Contact your state representative and state senator. Tell them to vote no on HB26-1036.

Ask a simple question: why should the state authorize new taxes on homes based on a vacancy timeline and housing definitions that can be set later by whichever government is taxing?

Read the bill