Colorado Lawmakers Block Resort Towns’ Vacant Homes Tax

## 1) Overview of the bill and outcome (what changed, and when) On **February 9, 2026**, **Colorado lawmakers** on the **Colorado House Finance Committee** voted to **postpone House Bill 26-1036 indefinitely**. In Colorado’s legislative process, “postponed indefinitely” is effectively **dead for the 2026 session**. That means **no new statewide authority** was created in 2026 to let **resort towns** adopt a special local tax on **vacant homes**.

HB 26-1036 mattered because it tried to create a **local-option “vacant home” tax tool**. The concept was simple: if a community has many homes sitting unused, the community could ask voters for permission to tax those homes and use the money for **affordable, attainable, or workforce housing**. Even though the bill failed, the debate is not going away. For immigrants and visa holders who own second homes, investment homes, or vacation property in Colorado, the key point is practical: **for tax year 2026 (returns filed in 2027), this bill does not create a new Colorado vacancy tax.** Your 2026 filing posture should reflect existing federal and Colorado rules, not a new vacancy-tax regime. The committee vote count and the committee date are important context, but the bigger takeaway is the legal effect: **no bill, no new local taxing power.** > 📅 **Deadline Alert**: For **tax year 2026**, most individuals file federal returns in **2027** by **April 15, 2027** (or by **October 15, 2027** with an extension). State and local developments can still affect deductions and reporting. Federal starting points for immigrants include **IRS Publication 519** (U.S. Tax Guide for Aliens) and the IRS international portal: – [IRS Publication 519 (PDF)](https://www.irs.gov/pub/irs-pdf/p519.pdf) – [International taxpayers](https://www.irs.gov/individuals/international-taxpayers) ## 2) Bill provisions and eligibility (what it would have allowed) HB 26-1036 would have authorized **counties, municipalities, or joint housing tax authorities** to impose a vacancy-related tax **only with local voter approval**. It contemplated two general designs: – **Excise-style tax**: Typically charged for an activity or status, often administered outside normal property tax billing. This can change **when** it is due and **how** it is appealed. – **Property-style tax approach**: Typically administered through assessors and treasurers, often tied to property tax systems. This can affect escrow practices and lender billing. The bill’s “vacant” concept was aimed at homes that are **not used as a primary residence** and sit **unused for substantial periods**. It also contemplated an exemption concept for **licensed short-term rentals**. a home used as a permitted short-term rental would generally not be the target. Revenue would have been restricted to housing purposes, such as: – Affordable housing development and financing – Attainable or workforce housing programs – Related local housing administration A major gatekeeper was added by amendment. Only jurisdictions with a **high vacancy-rate condition** would have been eligible. This was meant to narrow the tool to the most extreme resort-market situations. The exact percentage is important, but the practical meaning is that many Colorado communities would not have qualified. For immigrants and nonresidents, the design mattered. A property-style tax can sometimes be treated differently for federal deduction purposes than an excise-type charge. Federal deductibility often depends on what the charge is “for,” and how it is computed. The IRS discusses state and local taxes generally in Form 1040 instructions and Schedule A materials at **IRS forms and publications**: – [IRS forms and publications](https://www.irs.gov/forms-pubs) ## 3) Committee hearing and vote details (what the process signaled) HB 26-1036 had passed its **first reading** and landed in the **House Finance Committee**, the committee that typically stress-tests tax bills for administration, compliance burden, and economic effects. The hearing drew **heavy participation** and ran for **hours**, with many witnesses. That level of testimony is often a sign of real tension between: – State-level enabling power, and – Local governments’ desire to address local housing crises. The vote was not strictly along party lines. Several members crossed typical alignments, and the final result was the bill’s indefinite postponement. Politically, that combination often signals a proposal is not ready for statewide authorization, even if some resort communities strongly favor it. ## 4) Supporters and their arguments (why resort communities wanted it) Supporters included municipal and resort-community groups and officials from high-cost mountain markets. Their case centered on a basic claim: in some areas, vacancy is not a marginal issue. It is a **housing supply issue**. Supporters argued that when many high-value homes sit empty for much of the year, local workers face: – Long commutes from lower-cost areas – Displacement from the community where they work – Instability in school enrollment and local services They also argued the bill was **local-option**, not a statewide mandate. The pitch was: let communities with unusually high vacancy ask their own voters for authority, then use proceeds for workforce housing. For immigrant families, this matters if you own a second home near ski areas. A local vacancy tax could have increased the annual carrying cost. It also could have affected how you price your property if you rent it part-time. ## 5) Opponents and their concerns (administration, legal risk, fairness) Opponents did not focus only on housing policy. They focused on **feasibility** and **risk**. Administrative concerns included: – Proving a home is “vacant” versus seasonally used – Tracking occupancy evidence and handling audits – Staffing for enforcement and appeals – Coordination between assessors, treasurers, and licensing agencies Legal concerns included: – Potential constitutional or property-rights challenges – Disputes over definitions and exemptions – Litigation exposure that could delay collections for years Fairness concerns included the idea that property owners already pay property taxes and should not be penalized for how often they use a home. Cost estimates for implementation also made some communities wary, even if they shared the goal of more housing. > ⚠️ **Warning**: If a future vacancy tax is structured as a “fee” or “excise,” it may not behave like property tax for federal deduction purposes. Do not assume it will be deductible on Schedule A. From a federal perspective, immigrants should separate **state/local charges** from federal classification questions. If you are a **nonresident alien** filing **Form 1040-NR**, you generally cannot claim the standard deduction (with limited exceptions, such as certain students from India under treaty rules). See **Publication 519** for residency and filing status rules. ## 6) Local context and prior efforts (why this keeps coming back) Resort-market vacancy taxes have been tried locally before in Colorado. Some were rejected by voters. Others were stopped by councils due to legal uncertainty and administrative concerns. Those past outcomes help explain why HB 26-1036 was written as an enabling bill with voter approval requirements. Even so, the same barriers remained: – Can vacancy be measured and enforced fairly? – Will voters support it? – Will it survive court challenges? Because housing shortages persist, local governments may keep exploring alternatives. Those alternatives can include targeted lodging taxes, real estate transfer taxes where permitted, or housing linkage fees. Each has different administration and different federal tax treatment. ## 7) Next steps and implications (what to do now) As of **February 12, 2026**, there is **no further action** on HB 26-1036, and it is **dead for the 2026 session**. The immediate tax impact for property owners is straightforward: **no new vacancy-tax authority from this bill applies to tax year 2026**. Still, homeowners in resort counties should expect the policy debate to continue locally. Watch for: – Local ballot questions that use existing taxing authority – A revised bill next session with narrower eligibility or a different structure – Regional housing authorities seeking new funding mechanisms ### Before / After: What this means for 2026 planning (tax year 2026, filed in 2027) | Topic | **Before HB 26-1036 (status quo)** | **After Feb. 9, 2026 committee action** | |—|—|—| | Can resort towns create a vacancy tax under new state authority? | No new statewide authority existed. | Still **no**. The bill was **postponed indefinitely**. | | Voter-approved local vacancy tax option created by this bill | Not available | Not available | | Exemption concept for licensed short-term rentals (under this bill) | Not applicable | Not applicable | | Federal return impact for 2026 (Schedule A / 1040-NR considerations) | Depends on existing state/local taxes only | Same for 2026. No new charge from this bill to classify. | ### Practical actions and timeline – **Now through 2026**: Track local agendas in your county or municipality if you own a second home in a resort area. – **Tax year 2026 recordkeeping**: Keep clean documentation for rental vs personal use. This affects **Schedule E** and vacation-home limits under federal rules. – **Before filing your 2026 return in 2027**: Confirm your U.S. tax residency under **Publication 519**. Visa status matters, especially for F-1/J-1 substantial presence exemptions. – **If you are a nonresident landlord**: Review withholding and reporting rules. Nonresident rental income is commonly reported on **Form 1040-NR**. The IRS international portal is a good starting point: [International taxpayers](https://www.irs.gov/individuals/international-taxpayers) > ⚠️ **Disclaimer**: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax situations vary based on individual circumstances. Consult a qualified tax professional or CPA for guidance specific to your situation.