Steamboat Springs property managers consider Amendment 69’s impact on rentals
Steamboat Springs — Local property managers are speculating what might happen to rental rates were Amendment 69 to pass.
The amendment, which creates a new income tax to fund statewide healthcare, would tax rental property income at 10 percent.
While some Coloradoans have speculated that the 10 percent tax increase would transfer to a 10 percent increase in rental rates, MR Realty property manager and broker Ken Schomaker said the outcome probably wouldn’t be so simple.
“As much as things like this affect the owners, the rent is market rate,” Schomaker said. “The tenants set the market.”
Schomaker said tenants are legally protected from sudden increases in rent if they are on a rental lease.
“People who have a lease, they can’t expect their rent to go up 10 percent right away,” he said. “But all of a sudden, these owners could start realizing this extra cost, so they will try to recoup that.”
Proponents of Amendment 69 believe landlords could deduct the 10 percent tax on their rental income as part of their taxes the following year, effectively lowering the amount of rental income taxes and leading to an estimated net tax of about 5.5 to 8.5 percent.
Schomaker said in mid-October that he’d yet to hear concerns from any of his clients about the tax.
“I would suspect that if it does pass, and when people start doing their tax returns, then I’ll hear more about it,” he said.
Central Park Management owner Tara Weaver said she was aware of the tax and its possible implications, but added she hadn’t heard from any owners or renters about it.
Weaver said having a new tax that might lead to higher rents in Steamboat Springs could be troublesome.
“Steamboat is already in somewhat of an affordable housing crisis,” she said. “We’re seeing that housing is becoming unaffordable for our hourly, seasonal, front-of-the-line personnel. And Steamboat needs those people.”
Weaver speculated that landlords would look for a way to cover the additional cost of a new tax rather than absorb it.
“I definetly think it will be hurtful for the market,” she said. “It would be hurtful for everyone involved, from the landlords and then passed down.”
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1. Short-term rentals are creating a problem in Colorado ski towns. Is there a solution?