Local Taxes on Vacant Residential Property
HB1036 would authorize Colorado counties and municipalities, if approved by local voters, to impose either an excise tax or an additional property tax on vacant residential properties. The bill defines vacant residential units and vacant residential property, excludes licensed short-term rentals from that category, and allows local governments to set the tax as a flat amount or, in some cases, based on unit characteristics such as type, bedroom count, or square footage. Local governments could use the revenue only for affordable, attainable, or workforce housing, and if a housing needs assessment is required, the money would have to support a demonstrated need identified in that assessment.
The bill also creates a framework for two or more local governments to form a local housing tax authority through an intergovernmental agreement. That authority could coordinate elections, levy and collect approved taxes, issue debt, and administer enforcement within its boundaries. The measure expressly states that the Department of Revenue would not administer these taxes, places implementation responsibility on the local governments or authority, and clarifies that county assessors have no duty to implement the tax but may assist voluntarily. It also includes a legislative declaration that the proposed vacant-property ad valorem tax does not violate Colorado’s uniformity clause, and it preserves home-rule municipal powers.
HB1036 would add new statutory authority in Title 29 and Title 39 for local governments to tax vacant residential properties, creating a new local revenue tool tied specifically to housing policy. It would affect counties, municipalities, county assessors, local election officials, and potentially newly formed multi-jurisdictional local housing tax authorities, while limiting the use of proceeds to housing-related purposes. The bill would not create a statewide tax; instead, it would enable local option taxes subject to voter approval under TABOR procedures and would leave administration and enforcement at the local level.
The available voting history suggests the bill faced significant resistance in committee. In House Finance, a motion to send the bill to the Committee of the Whole failed 4-7, and the bill was then postponed indefinitely by a 7-4 vote. At the same meeting, two amendments were adopted unanimously or nearly unanimously, indicating some willingness to refine the proposal even as overall support was insufficient to advance it. No committee transcript was provided, so the record reflects procedural outcomes more than detailed debate.
The main points of contention appear to be whether local governments should have authority to tax vacant homes at all, and whether such taxes are an appropriate or effective response to housing shortages. Likely concerns include impacts on property owners, the administrative burden of identifying and classifying vacant properties, the exclusion of short-term rentals from the tax base, and possible legal or constitutional issues around property-tax uniformity and local taxing power. Supporters appear to have framed the bill as a housing-supply and affordability measure, while opponents in committee were not persuaded enough to advance it.