The House Finance Committee killed HB26-1036 on February 10 by a 7-4 vote after three Democrats joined all four Republicans to postpone the bill indefinitely. The legislation would have authorized counties and municipalities to tax residential properties deemed vacant and use revenues exclusively for affordable, attainable, or workforce housing.
Under current law, Colorado has no vacancy tax. TABOR requires voter approval for all new taxes. The bill would have created two new taxation options: an excise tax on vacant units and a new property tax classification for vacant residential properties with additional ad valorem taxes.
The bill defined neither “vacant” nor the time threshold triggering taxation. Each county, municipality, or local housing tax authority would determine how long properties must remain “unoccupied and not used as a residence” before facing taxes. The legislation exempted licensed short-term rentals but not unlicensed properties on waitlists in jurisdictions with STR license caps. It also authorized multi-jurisdiction housing tax authorities to levy, collect, and enforce taxes across county lines.
Sponsors Representatives Brianna Titone of Arvada and Elizabeth Velasco of Glenwood Springs amended the bill during the hearing to restrict the taxing authority to jurisdictions where vacancy rates exceed 25%. According to 2024 American Community Survey data, Summit County’s vacancy rate is 61%, Pitkin County 55%, and Eagle County approximately 50%, compared to 4% in Front Range urban areas. Twenty-three of Colorado’s 64 counties would have met the threshold.
Elizabeth Haskell of the Colorado Municipal League testified that municipalities “are hearing from employers who can’t hire workers, who are leaving, and families living in overcrowded and substandard conditions, because there’s no alternative.” The Colorado Association of Ski Towns and Counties and Commissioners Working Together supported the measure. Velasco said the bill targeted “$20, $30 million mansions” in resort towns where local workers cannot afford housing.
Weld County Commissioner Scott James testified the bill “weakens property rights by turning a locally defined ‘vacancy’ into a tax target.” Real estate groups, homebuilders, and landlord associations opposed the measure. Vail real estate agent Michelle Rampelt noted that second homeowners pay property taxes without using services proportionally.
The bill raises questions about property rights protections and local taxing authority limits. Vancouver, British Columbia implemented an Empty Homes Tax in 2017 that generates revenue and returns properties to market. San Francisco’s vacancy tax faces ongoing legal challenges over administrative feasibility and constitutional concerns.
Representative Sean Camacho of Denver provided the decisive Democratic vote, citing constituent concerns about “fundamental fairness” and asking: “If I own property in a community, and I’m paying my property taxes, don’t I have the right to choose what I do with that property?” Representatives Rebekah Stewart of Lakewood and Bob Marshall of Highlands Ranch also voted to postpone.
Status: Postponed indefinitely in House Finance Committee, February 10, 2026.
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