Concerning authorization for a local government to impose taxes on vacant residential properties, and, in connection therewith, allowing a local government to levy an excise tax based on the characteristics of a residential property, allowin...
HB26-1036 would authorize counties and municipalities, subject to voter approval, to impose new taxes on vacant residential properties. The bill creates two related tax tools: an excise tax that can be set as a flat amount or based on unit characteristics such as bedrooms or square footage, and an additional ad valorem property tax on real property classified as vacant residential property. In both cases, the local government would define what counts as “vacant” for a specified period of nonuse, and short-term rental units or properties licensed for short-term rental use are excluded from the vacant-property definition.
The bill also allows two or more contiguous or overlapping local governments to form a “local housing tax authority” through an intergovernmental agreement. That authority could coordinate elections, levy and collect the tax, enforce delinquencies, issue bonds or notes, and administer the program across member jurisdictions. The Department of Revenue would have no role in collecting or enforcing these taxes; instead, the local government or authority would handle administration, with county assessors serving only in a discretionary support role. Revenue from either tax would be restricted to affordable, attainable, or workforce housing, and if a local housing needs assessment exists, the money would have to support identified housing needs.
The bill’s impact on state law would be to add explicit statutory authority in Title 29 and Title 39 for local governments to tax vacant residential property, while also declaring that the proposed ad valorem tax does not violate Colorado’s constitutional uniformity clause because it is a property classification based on the nature of the property. It would create a new legal framework for intergovernmental housing tax authorities and set procedures for public hearings, elections under TABOR, revenue use, boundary changes, and enforcement. It would also preserve home-rule municipal powers and allow local governments to tailor vacancy rules and tax structures within the bill’s limits.
The general sentiment reflected in the available record is limited, but the bill appears to have been introduced as a housing-policy measure aimed at encouraging productive use of residential property and generating dedicated funding for housing. There are no recorded committee transcripts or votes in the provided material, but the bill was ultimately postponed indefinitely in the House Finance Committee, indicating that it did not advance. That outcome suggests either insufficient support or unresolved concerns at the committee stage.
The main points of contention likely center on local taxing authority, property-rights concerns, and the practical difficulty of defining and enforcing vacancy. The bill gives local governments broad discretion to determine vacancy periods, tax rates, and classification guidelines, which could raise concerns from property owners, landlords, and short-term rental operators. Supporters would likely emphasize the housing-funding purpose and local control, while opponents may object to adding another layer of taxation on residential property and to the potential administrative burden of identifying vacant units and coordinating elections and enforcement.
The bill would amend Colorado law to expressly authorize counties, municipalities, and joint local housing tax authorities to levy excise taxes and additional ad valorem property taxes on vacant residential property, subject to voter approval. It would create new statutory provisions in Titles 29 and 39 governing tax definitions, election procedures, administration, enforcement, revenue restrictions, assessor participation, and intergovernmental agreements, while excluding short-term rental properties from the vacant-property tax base and preserving home-rule authority.
The available context suggests the bill was framed as a housing-affordability and local-control measure, with revenue dedicated to affordable, attainable, or workforce housing. However, no committee transcript or vote record is provided, and the bill was postponed indefinitely in House Finance, indicating that it did not receive enough support to advance. The lack of recorded debate in the materials makes the overall sentiment difficult to measure beyond that procedural outcome.
Likely areas of contention include whether local governments should be allowed to impose a new tax on vacant homes, how vacancy should be defined, and whether the proposal could burden property owners or affect short-term rental markets. Another likely issue is administrative complexity: the bill places collection and enforcement on local governments or newly created authorities rather than the Department of Revenue, and it requires voter approval and, for joint authorities, intergovernmental agreements and public hearings. Supporters would likely focus on housing supply and dedicated funding, while critics would likely question fairness, enforceability, and the expansion of local taxing power.