2024 housing bills summary (Ouray, San Luis: tax lien, sale, real estate)

[2bindenver]

This session has a few housing related bills.

Here is a summary and short explanation.

Of note is that STRs may be taxed at a higher rate starting in 2026.

https://smdra.com/wp-content/uploads...s-Jan-2024.pdf

[waltcolorado]

Ouray county just raised tax's on short term rental https://www.cityofouray.com/city_off...x%20for%20STRs.

Glad they did. I don't care for someone running an obnoxious business in my neighborhood. I live next to several and its NOT a good thing. Heard plenty of complaining mostly from out of state folks because their lucrative business got taxed as a (shock) business. The argument that this helps the local economy really means that hotels are not going to be built. Lodging should be a business and in areas where its zoned. Leave my neighborhood alone.

Does allowing short term rentals end up increasing property value - and making it even more difficult for young people to afford a home? I would guess so because CAR who represents real estate agents and their profits has the counterproposal below.

The Colorado Association of REALTORS® (CAR) have also been engaged on a strategic counterproposal that would exempt primary and secondary residences from being classified as lodging
regardless if used as an STR and therefore, both residences would not be taxed at the higher 27.9%
rate.

[interloper1138]

Thanks for posting this, as I was unaware of some of this proposed legislation.

I'm pretty salty about the proposed treasurer's deed changes in HB24-1056. This would result in huge losses in revenue to many of the counties in the San Luis Valley, as we have extensive delinquent properties every year, over a thousand parcels each year in Costilla County alone. This bill would essentially de-incentivize anyone to become a tax lien holder, as they would receive no real benefit whatsoever for doing so. The proposed changes would allow anyone (read: large-scale real estate investment firms) to swoop in at a public auction at the last minute to out-bid the lien holders that have been waiting three years and paying all associated taxes and fees in that time.

I understand the heart of the bill is to prevent homeowners from losing their equity through the tax foreclosure process, which I fully support changing the law to accommodate. But for vacant land that has been abandoned by its owners, this would be a disaster for counties like ours. If someone can't cough up $75 a year for 5 acres of land three years in a row, why should the county jump through hoops and institute an expensive new layer of red-tape through an auction system to protect their 'equity'?

There needs to be distinctions in this process for raw land as opposed to improved land. Looks like I'll be busy writing a letter this weekend..

[bluescreen73]

Originally Posted by waltcolorado

Ouray county just raised tax's on short term rental https://www.cityofouray.com/city_off...x%20for%20STRs.

Glad they did. I don't care for someone running an obnoxious business in my neighborhood. I live next to several and its NOT a good thing. Heard plenty of complaining mostly from out of state folks because their lucrative business got taxed as a (shock) business. The argument that this helps the local economy really means that hotels are not going to built. Lodging should be a business and in areas where its zoned. Leave my neighborhood alone.

Does allowing short term rentals end up increasing property value - and making it even more difficult for young people to afford a home? I would guess so because CAR who represents real estate agents and there profits has the counterproposal below.

FWIW - I work on the periphery of the STR market, and I can tell you that other than providing alternative lodging for tourists/short-term workers, STRs provide little-to-no benefit to the neighborhoods and cities they're in. In a vast majority of the cases, you end up with disengaged property owners who don't have a true stake in the community because they don't live anywhere near the property they're renting out. STRs do drive up real estate values, and they are increasingly being gobbled up by institutional investors.

[Landmass]

Originally Posted by interloper1138

Thanks for posting this, as I was unaware of some of this proposed legislation.

I'm pretty salty about the proposed treasurer's deed changes in HB24-1056. This would result in huge losses in revenue to many of the counties in the San Luis Valley, as we have extensive delinquent properties every year, over a thousand parcels each year in Costilla County alone. This bill would essentially de-incentivize anyone to become a tax lien holder, as they would receive no real benefit whatsoever for doing so. The proposed changes would allow anyone (read: large-scale real estate investment firms) to swoop in at a public auction at the last minute to out-bid the lien holders that have been waiting three years and paying all associated taxes and fees in that time.

I understand the heart of the bill is to prevent homeowners from losing their equity through the tax foreclosure process, which I fully support changing the law to accommodate. But for vacant land that has been abandoned by its owners, this would be a disaster for counties like ours. If someone can't cough up $75 a year for 5 acres of land three years in a row, why should the county jump through hoops and institute an expensive new layer of red-tape through an auction system to protect their 'equity'?

There needs to be distinctions in this process for raw land as opposed to improved land. Looks like I'll be busy writing a letter this weekend..

Interloper, if passed into law, does this mean that there will be a tax deed sale in addition to the already existing tax lien sale?
I'm a local tax lien investor and was just about to purchase a tax lien from another local person but I'm now wondering how this will affect things. I know that treasurer's deeds are not being issued until this issue is resolved via legislation.
Any advise or info on this is appreciated!

[interloper1138]

Yes, that is what the bill means. Under the proposed changes, in addition to the current tax lien certificate auctions that occur each year, there would now be a new system where after a lien investor has waited three years and applied for the treasurer's deed, a new public auction (open to any bidders) will take place for the final treasurer's deed. If the lien holder is not the one who wins this auction, they would be repaid for any money they are owed, but the deed will go to the highest bidder. If there are no other bids, the lienholder would receive the deed without having to pay any additional funds (a scenario I find incredibly unlikely). All excess funds from this final auction would go to the original property owner.

Like you, I'm a small-scale tax lien investor myself. It's a side business for me (more of a hobby, really), but it's something I care about and spend a lot of time researching. I actually wrote both my state senator and state rep about this today. Here's the response from my state senator, Cleave Simpson:

So I have not tracked this closely, but I understand this is a necessary policy as a result of the US Supreme Court ruling last year: U.S. Supreme Court decision, Tyler v. Hennepin County, 143 S. Ct. 1369 (2023). I am attaching the Colorado AG Formal Opinion as well. The bill in the House was the result of discussion last summer with the Legislative Oversight Committee Concerning Tax Policy, of which I did not participate or follow! I actually have a bill I am working on that also addresses this issue with regard to mobile homes, but still early in that process. I will have to review the bill in detail and your suggestions to see what opportunities there might be, particularly with regard to the directive from the US Supreme Court?

It appears that the state may have its hands tied to some extent on this as a result of the US Supreme Court ruling. I was under the impression that this ruling only affected homes that were sold through tax foreclosures, as opposed to all types of property. I hope that some sort of accommodations can be made but unfortunately that may not be the case. Time will tell, but it looks like my side gig might be coming to end.

[2bindenver]

Senate bill 23-184

https://leg.colorado.gov/bills/sb23-184

The act prohibits a landlord from requiring a tenant to submit a security deposit in an amount that exceeds the amount of 2 monthly rent payments.

Where it get Real Estate Brokers is the Post Closing Occupancy Agreement.

[wong21fr]

Originally Posted by 2bindenver

Senate bill 23-184

https://leg.colorado.gov/bills/sb23-184

The act prohibits a landlord from requiring a tenant to submit a security deposit in an amount that exceeds the amount of 2 monthly rent payments.

Where it get Real Estate Brokers is the Post Closing Occupancy Agreement.

Just ran into this one. No more PCOA with a security deposit and no rent.