Denver
Can you run an Airbnb or do rental arbitrage here? What the city requires: permits, taxes, safety rules and enforcement.
Red light: only your primary residence can be licensed
Denver licenses a short-term rental only at the host's primary residence.[1] A property that isn't your primary residence isn't eligible, so a unit you lease only to sublet doesn't qualify.[2] Booking sites also can't take payment for an unlicensed rental.[3]
Our verdict, based on the sources at the end of this guide.
Denver licenses short-term rentals only at the host's primary residence, which the city defines as the place where you usually return.[1, 3] If the property isn't your primary residence, it isn't eligible for a license.[2] Renters can get a license for their own home, but they need the property owner's written permission.[3] Booking sites can't take payment for an unlicensed rental, and fines run up to $999 per incident.[2, 3]
Key requirements
Primary residence only
Every short-term rental needs a license, and it must be the host's primary residence.[1] It's unlawful to operate a short-term rental anywhere that isn't your primary residence, and a person can have only one.[3] If the property isn't your primary residence, it isn't eligible to be licensed.[2]
How the city checks
The city can look at whether you claim another home for domestic, legal, billing, voting or licensing purposes, how often you return, and how much of the year the rental is booked.[3] The FAQ says that if you aren't usually able to return because the home is rented, it stops being your primary residence.[2] You must show documents proving residency on application and renewal.[2]
City license
Get a license before you offer, provide or operate a rental.[3] It costs a $50 application fee and a $100 license fee, and a license is valid for one year.[3, 4] The city says initial reviews can take up to 30 days and specialist reviews up to 90 days.[7]
Application papers
Send a valid Colorado driver's license or ID card and at least two documents showing the home is your primary residence, such as a vehicle registration, voter registration, tax returns or a utility bill.[3] You also need proof you hold the lease or deed, written permission from the owner if you rent, and a Denver lodger's tax account number.[3] If you have an HOA, tell it about the rental before you apply.[4, 8]
Lodging license route
The city says a property that isn't your primary residence would need a lodging facility license instead.[2] Those are limited to certain zone districts, and a change of building occupancy class could be required, which will likely mean construction such as fire sprinklers, alarms, exit signage and accessibility upgrades.[2]
Operational and safety standards
Listing and safety
Show your license number clearly on the face of every advertisement.[3] Keep a working smoke detector, carbon monoxide detector and fire extinguisher on the premises.[3]
Insurance
Carry liability insurance of at least $1,000,000 in the aggregate, or run every stay through a platform that gives equal or greater coverage.[8] Tell your insurance carrier about the rental before you take any booking.[4, 8] If you let the policy lapse, the license is automatically suspended until coverage is back.[8]
Local responsible party
Name a local responsible party who is in Denver for the whole rental, has access to the unit and can make decisions about it.[3] Leave a brochure in the unit with your contact details, that person's contact details, emergency contacts and neighborhood information such as parking, noise and trash rules.[3] Report any change to that person within 30 days.[8]
Guests and use
You don't have to be home during stays, and you set the maximum number of guests.[2] You can't rent to more than one party under separate contracts at the same time.[2] The home must stay residential, so commercial events such as parties or weddings aren't allowed.[2]
Zoning and unit types
Short-term rentals are allowed as an accessory use wherever residential uses are allowed.[2] Each unit in a duplex can get its own license for its primary resident.[2] An owner or long-term renter living in the main house can rent an accessory dwelling unit, but someone living in the accessory unit can't rent the main house.[2]
Tax obligations
Lodger's tax
Denver charges lodger's tax of 10.75% on the entire amount charged for lodging of fewer than 30 consecutive days.[6, 9] Denver's guide puts the sales tax the state collects on lodging at 4%, for a 14.75% total.[6] The state's rate table shows that 4% is the 2.9% state rate plus 1% for the Regional Transportation District and 0.1% for the Scientific and Cultural Facilities District.[10]
Who collects
You collect and remit the tax if you book direct or through a site that doesn't collect it.[6] A platform collects it only if the payment runs through the platform and it appears as the merchant of record on the guest's statement.[6] Either way, you need a lodger's tax account to apply for the license.[3]
Platform bookings
If a licensed platform collects the tax on all your sales, you still file a return and deduct those sales on the Other deductions line.[9] Sales through platforms that don't collect and remit the Denver tax stay taxable on your return.[9]
Other city taxes
You also pay occupational privilege tax, which the city FAQ puts at $48 a year.[2] The city's tax sheet adds business personal property tax on assets used in the business.[9] Hosts pay sales or use tax on items they buy for the rental, such as beds and linens.[6]
Stays of 30 days or more
Denver's guide treats lodging as taxable unless the guest has a written agreement for at least 30 consecutive days and actually pays to stay that long.[6] The state's guidance exempts rooms rented to a permanent resident under a written agreement for at least 30 consecutive days, but says it doesn't cover taxes run by home-rule cities.[11]
Enforcement
Fines and sanctions
The director can levy penalties, fines or suspensions, or call show-cause hearings that could lead to revocation.[2] Fines can be up to $999 per incident.[2] A license can't be transferred to another person or location.[3]
Revocation, records and renewal
The city can deny, sanction or revoke a license if the rental adversely affects the public health, safety or welfare of the immediate neighborhood, or if the property isn't your primary residence.[2] Keep records of the nights you rented and the dates for the past year.[3] You can renew up to 60 days early, and operating after the expiration date without a complete renewal application on file is unlawful.[2, 3]
Booking sites
It's unlawful for a booking service provider to take payment, directly or indirectly, for an unlicensed short-term rental in Denver.[3] The provider faces a civil penalty of $1,000 per violation per day.[3]
Complaints and inspections
Neighbors can file complaints through 311 at 720-913-1311, and the city tells you about each complaint filed against your license.[12] Department inspectors also run proactive enforcement.[2] An application may need an in-person inspection, and refusing one means denial.[2]
State law
Colorado has no statewide short-term rental rules.[13] State law lets counties license and regulate them, and home-rule cities like Denver were already regulating them on their own.[13]
Bottom line for arbitrage
Skip Denver for arbitrage. The city only licenses a home you live in, so a unit you lease to sublet can't qualify.
Step 1 is the hard part. We find landlords who already said yes →
Sources
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