Policy would seek to generate revenue for the city’s general fund from homes that are unoccupied 183 days a year or more.
Steamboat Springs City Council is considering one of the first vacancy tax proposals in the country that would have a stated purpose of generating general fund revenue by taxing homes that are unoccupied for more than 183 days a year.
A vacancy tax of $3,000 a year paid by residential property owners if their home isn’t being used at least half the time could generate anywhere from $4.25 million and $9.75 million each year, according to city staff estimates. The broad range for potential revenue stems from an imprecise understanding of how many vacant homes are out there.
The concept of a vacancy tax — a name that Council briefly word smithed on Tuesday — has only been implemented in a handful of cities, none of which are in Colorado. Steamboat’s vacancy tax would be different from those, however, as it would have the goal of producing revenue, as opposed to more policy-focused goals of reducing vacancy or cleaning up blight.
“I think it’s revenue, I think it’s general fund,” Council member Steve Muntean said in response to a question about what the goal of the tax should be, a comment quickly agreed to by the rest of council.
Any vacancy tax proposal would need to be approved by Steamboat voters in November. This fall’s ballot may also include a lift tax proposal, which council also advanced forward on Tuesday, another measure being drafted in an attempt to diversify the city’s revenue sources. Finding more sources of revenue has long been a goal of city leaders and has been a topic discussed by the current iteration of city council since early 2024.
As discussed on Tuesday, the vacancy tax proposal would essentially seek to recover a tax-imbalance enjoyed by homes that are largely unoccupied. Homes without anyone living there still receive city services like police, fire and snowplowing but lack residents to support the cost of those services by paying Steamboat sales taxes.
Council members very quickly agreed that the goal of the tax should be to generate revenue and that those monies should go into the general fund unincumbered.
Because the goal is to generate revenue, city staff recommended that short-term rental stays would count toward overall occupancy, as STR users are in town paying sales taxes, in addition to the taxes collected on the stay itself. For example, if a unit is rented out as an STR for 120 days a year and then used by the owner for another 63 days, it would qualify as an occupied unit and avoid paying the tax.
City Attorney Dan Foote said the 183-day number was chosen because it is a simple majority of days in a year, making it easy to verify that locals wouldn’t need to pay the tax through primary residency. As for how much the tax would be, that is still very much in question.
City Finance Director Kim Weber said their number of $3,000 a year came from an analysis of city revenues, though this was characterized as more of an example than a recommendation. Council members indicated they wanted to explore a tax rate that was based on square footage or the number of bedrooms in a vacant home, rather than a flat rate.
Options for how to set the tax rate will be reviewed again during a work session in May. Council said they were not ready for staff to start drafting ballot language yet, though they have until mid-August to approve a question.
The name of this vacancy tax was also briefly debated on Tuesday, with options like vacation-home tax, part-time occupancy tax and second-home tax being tossed out initially. Council member Bryan Swintek said he felt calling it a second-home tax could aid in it’s passing — “It will be more politically advantageous,” he said. Council member Dakotah McGinlay said calling it a part-time tax could annoy voters who used to be part-time residents.
Council President Gail Garey suggested the term “neighborhood stewardship tax,” saying that was a term contemplated by the Colorado Association of Ski Towns.
“I have a personal objection to naming pieces of legislation with deceptive titles,” said Council Member Joella West, who said she felt calling it a vacancy tax was appropriate.
Council moves lift tax discussion forward favoring policy that captures more than daily pass sales
Council members also advanced discussions about a lift tax at Steamboat Resort on Tuesday, a process happening in parallel to negotiations with Steamboat Ski & Resort Corp. about its contributions to the city.
Weber presented three main options for how a lift tax could operate based on three different policies in place in other ski towns. Breckenridge collects a lift tax on daily and multi-day passes but excludes season passes and multi-resort passes. In Vail, the lift tax is assessed on all tickets and pass sales, including multi-resort passes. Yet another policy used in Snowmass is based on the number of skier days each year.
“There is a strategic advantage for the resorts to push the passes. Increase the price of day tickets so people buy passes because it creates certain cashflow whether or not there is good snow,” Swintek said. “I would advocate for tying it to skier days or to all including passes. That way if there are strategic changes in the industry, this still remains relevant.”
Weber's presentation included a slide comparing contributions resorts make to the local municipality. While Steamboat Resort does contribute roughly $600,000 to the city each year voluntarily, that is a fraction of what other ski resorts are paying. Vail's lift tax is expected to contribute $6.9 million in 2025, Breckenridge expects to get $4.4 million and Snowmass will see $2.4 million.
Dave Hunter, president and chief operating officer of Ski Corp., reiterated that the resort does support a lift tax so long as the revenue it produces doesn’t flow into the city’s general fund. Hunter said the resort is unsure if its current voluntary contributions of roughly $600,000 a year to the city earmarked for transit are actually spent on transit.
The resort has pushed for a lift ticket tax to support transportation, though resort officials often mention a Regional Transportation Authority in this context, not necessarily additional support for Steamboat Springs Transit. In his comments to Council on Tuesday, Hunter too suggested revenues from a lift tax be used to support an RTA.
“We do not support a lift ticket tax that goes to the general fund as it’s not guaranteed to go to transportation,” Hunter said. “We look forward to working with the city as partners as we work through the process to discuss how we continue to support SST while not jeopardizing the RTA.”
Some council members argued that when they think about a lift tax supporting transit, it’s supporting SST not an RTA.
“I’m thinking local SST,” said Council member Amy Dickson, a comment Swintek agreed to as well. “RTA is filling a need outside of Steamboat. When people get here, how are we transporting them efficiently around the city.”
“To me it’s both,” Garey said.
Swintek argued that lift tax revenues should be able to be used for a broader range of services, as the resort puts pressure on the city’s police and fire services in addition to transit.
“If it goes to the general fund, it isn’t like it goes into someone’s pocket, it’s allocated based on where the dollars need to go,” Swintek said. “It’s isn’t like we just randomly decide how to spend the money.”
Like with the vacancy tax, Council will discuss a lift tax again at their May work session. In that meeting, they will also get an update on negotiations with Steamboat Resort. While Council is working toward a November ballot question, a potential outcome of those negotiations could be some sort of resort contribution in lieu of a lift tax vote.