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IMPORTANT DISCLAIMER: This content is current as of March 30, 2026. Short-term rental regulations change frequently and vary significantly by municipality. Before operating any property as a short-term rental in Colorado, verify current requirements with your local city/county planning department or a local real estate attorney.

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Colorado Short-Term Rental Laws: A Fractured Regulatory Landscape

Colorado has no statewide short-term rental regulations. This means cities and counties exercise significant autonomy in setting STR rules, and operators must comply with local ordinances that vary dramatically from Denver to the mountain resort towns of Vail and Aspen.

What this means: A property management company operating in both Denver and mountain resort towns must track completely different regulatory frameworks. Denver allows owner-managed STRs in residential neighborhoods but caps non-owner-occupied units. Vail restricts STRs to commercial zones. Aspen requires owner-occupancy for certain property types.

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Colorado State Law: What You Need to Know

At the state level, Colorado law defines a short-term rental as any residential dwelling rented for fewer than 30 consecutive days. Colorado imposes a 4% Short-Term Rental Rental Tax on bookings, which is remitted by platforms like Airbnb and VRBO or directly by operators.

Colorado state taxes on STRs:

• Short-Term Rental Tax: 4% (state level)
• Home Rule Municipalities: Can add their own excise taxes of 2-8%
• Combined effective rate: 6% to 12% depending on location

Unlike Washington or Texas (which impose hotel occupancy taxes on STRs), Colorado has created a dedicated STR tax separate from general sales tax.

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Denver Short-Term Rental Ordinance (Most Populated Market)

Denver's STR regulations represent one of Colorado's most developed frameworks, with specific rules for owner-occupied vs. non-owner-occupied properties.

Denver STR Regulations at a Glance

• License required: Yes—through Denver Department of Excise & Licenses (online)
• Owner-occupancy requirement: No owner-occupancy mandate for primary residences, but owner-managed vs. non-owner-occupied properties have different rules
• Ownership structure: Owner-managed (host has primary residence in the unit or manages it directly) vs. Non-owner-occupied (entire unit rented out by non-resident owner)
• Annual registration fee: $1,200 (license + renewal)

Owner-Managed vs. Non-Owner-Occupied in Denver

Owner-Managed STRs (more favorable)

• Definition: Property owner resides in the unit for at least 275 days per year OR property manager directly manages the property
• License cost: $600 annually
• Rental restrictions: Allowed in all residential zones
• Max occupants: Limited to 8 people per unit
• Allowed zones: All single-family, duplex, and multi-family residential zones
• Special events allowed: Yes (with restrictions)

Non-Owner-Occupied STRs (more restricted)

• Definition: Owner does not reside in the property; typically operated by PM or corporate entity
• License cost: $2,000 annually
• Rental restrictions: Allowed in limited commercial/mixed-use zones only
• Max occupants: Limited to 12 people per unit (larger capacity)
• Zones where allowed: C-4-x, C-5-x, C-6-x, B-RX, B-LX zones only (more restrictive)
• Additional requirement: Non-owner-occupied operators must file quarterly compliance reports

This is a critical distinction in Denver: an owner who lives in the property and rents out 5+ bedrooms has much cheaper licensing and broader zoning eligibility than a property manager or corporate owner operating non-owner-occupied units.

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Denver Neighborhood Restrictions (Ultra-Important)

Denver has created Restricted Occupancy Neighborhoods (RONs) where STRs are heavily limited:

• Affected neighborhoods: Congress Park, Cheesman Park, City Park, North Capitol Hill, South Capitol Hill, and others
• Restriction: Owner-managed STRs allowed only if owner occupies property 275+ days/year; non-owner-occupied STRs prohibited entirely
• Current impact: As of 2026, Denver has ~7,500 registered STRs and neighborhoods with restrictions are actively policed

If your property sits in a Restricted Occupancy Neighborhood and you don't owner-occupy it, you cannot legally operate an STR in Denver. Many owners discovered this too late and had to stop operations mid-season.

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Colorado Mountain Resort Towns: Vail, Aspen, and Beyond

Vail Short-Term Rental Regulations

Vail is restrictive, with STRs confined to commercial zones:

• License required: Yes—through Town of Vail Community Development
• Allowed zones: C-1, C-2, M (commercial and mixed-use)
• Residential zones: STRs prohibited in residential neighborhoods
• License cost: $800/year
• Owner-occupancy: Not required in commercial zones
• Tax rate: 8% excise tax (town-level, on top of 4% state)

This severely restricts STR supply and keeps Vail properties operating predominantly as traditional rentals or owner-occupied homes.

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Aspen Short-Term Rental Regulations

Aspen is similarly restrictive but has an owner-occupancy twist:

• License required: Yes—Town of Aspen Planning & Zoning
• Owner-occupancy: Required for many property types (unlike Denver)
• Allowed in residential zones: Only if owner-occupied for 180+ days/year
• License cost: $1,000/year
• Tax rate: 9% excise tax (town-level)
• Cap on licenses: Total STR cap at 300 licenses (highly restrictive; many properties on waitlist)

Aspen's limited STR caps and owner-occupancy requirements mean fewer investment STRs and higher barrier to entry for corporate PMs.

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Boulder Short-Term Rental Regulations

Boulder is the most restrictive Colorado city:

• License required: Yes—City of Boulder Community Planning & Permitting
• Owner-occupancy: Required—property owner must live in the unit
• Max nights per year: 42 nights of rental (severely restrictive)
• License cost: $500/year
• Exceptions: Owner must occupy primary residence; no corporate or investor STRs allowed
• Effective result: Boulder has effectively banned investment-based STRs

Boulder's 42-night annual cap effectively eliminates professional short-term rental operations. Only homeowners who occasionally rent out their primary residence can legally operate STRs in Boulder.

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Other Colorado Cities & Counties with STR Regulations

• Colorado Springs: License required; $250/year; owner-occupancy not required; allowed in most zones
• Fort Collins: License required; $300/year; owner-occupancy not required
• Longmont: License required; $400/year; owner-occupancy required for most zones
• Loveland: License required; $200/year; owner-occupancy not required
• Pueblo: No active STR licensing program (largely unregulated)
• Durango: License required; $600/year; owner-occupancy not required in commercial zones
• Telluride: License required; $1,000/year; owner-occupancy required for residential zones
• Summit County (Breckenridge, Keystone, Silverthorne): License required; $500-800/year; owner-occupancy varies by town

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Colorado Short-Term Rental Tax Breakdown

State-level taxes

• Short-Term Rental Excise Tax: 4% (statewide)

City-level additions (on top of state 4%)

• Denver: 10.25% (total combined rate: 14.25%)
• Boulder: 4% + home rule (total: ~8-9%)
• Colorado Springs: 4% state + 4% local (total: 8%)
• Vail: 4% state + 8% local (total: 12%)
• Aspen: 4% state + 9% local (total: 13%)
• Telluride: 4% state + 7% local (total: 11%)
• Fort Collins: 4% state + 5% local (total: 9%)

Example: $1,000 booking in Aspen

• State tax (4%): $40
• Local tax (9%): $90
• Total taxes remitted: $130
• Host take-home: $870

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How to License an STR in Colorado

Denver process (example):

1. Determine if property is owner-managed or non-owner-occupied
2. Verify property is in an allowed zoning district and not in a Restricted Occupancy Neighborhood (or meets owner-occupancy requirements)
3. Apply through Denver Department of Excise & Licenses (online portal)
4. Provide proof of property ownership, insurance ($300K minimum liability), and neighborhood compatibility statement
5. Pay annual license fee ($600-2,000 depending on type)
6. Receive STR license number; display on all listings
7. Renew annually

Multi-city Colorado operators must manage different licensing, tax rates, and zoning rules for each municipality. A property manager operating in Denver, Boulder, and Vail faces dramatically different regulatory burdens and profit margins across the three markets.

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Enforcement & Penalties in Colorado

• Operating without license: $500-2,500 fine per violation + cease-and-desist order
• Violating owner-occupancy requirements: Up to $5,000 fine + license revocation
• Operating in prohibited zones: $1,000-3,000 fine + property closure order
• Non-compliance with tax collection: Penalties equal to 15-20% of unpaid taxes + interest
• Exceeding rental day limits (Boulder): $2,500 per violation

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Key Takeaways for Colorado STR Operators

• No state preemption: Cities and counties enforce their own STR frameworks; local rules supersede assumptions about what's legal statewide
• Owner-occupancy varies dramatically: Denver allows non-owner-occupied STRs in certain zones; Boulder and Aspen require owner-occupancy; Vail prohibits residential STRs entirely
• Tax rates are high: Combined state + local rates range from 8% to 13%
• Zoning restrictions are tight: Especially in mountain resort towns and restricted neighborhoods
• Denver's RONs are a trap: Many property owners didn't realize their neighborhood is a Restricted Occupancy Neighborhood and had to shut down operations
• License costs vary widely: From $200/year in smaller towns to $2,000/year in Denver for non-owner-occupied units
• Day-limit restrictions exist: Boulder's 42-night limit is the most severe, but other towns have lesser caps
• Multi-market property managers: Managing STRs across Denver, Aspen, Boulder, and mountain towns requires detailed compliance tracking

RedAwning manages short-term rental properties across Colorado and helps operators navigate Denver's Restricted Occupancy Neighborhoods, mountain resort regulations, and varying tax obligations. For property managers operating across multiple Colorado markets, understanding the city-specific frameworks is essential to avoid costly fines and license revocation.