Understanding Short-Term Rental Regulations in Durango, CO: A Beginner’s Guide

Durango, Colorado, is a popular destination for travelers, making it an ideal location for short-term rentals. However, operating a vacation rental here requires a solid understanding of local regulations, licensing, and tax obligations. Staying compliant with these rules not only keeps your business running smoothly but also protects you from potential fines and legal issues. This guide will walk you through Durango’s short-term rental regulations, help you understand licensing and tax requirements, and offer tips to make compliance easier.

The Basics of Short-Term Rental Regulations in Durango

Short-term rentals (STRs) in Durango are defined as residential properties rented out for fewer than 30 consecutive days. To legally operate an STR, property owners must meet certain criteria set by the city to help balance the benefits of STRs with the community’s needs. Here’s what you need to know about getting started:

• Zoning and Location Restrictions:
  Durango regulates STRs based on zoning. In some residential zones, STRs may be prohibited, while other areas have a limited number of STR permits available. Before listing your property, check if it’s located in a zone that allows short-term rentals and if permits are available.

• Occupancy Limits and Parking Requirements:
  Durango sets occupancy limits based on the size and layout of your property, typically allowing two guests per bedroom plus two additional guests. Additionally, you may need to provide adequate on-site parking to meet city requirements. Be sure to inform guests of these limits to maintain compliance.

• Restrictions on Non-Owner-Occupied Rentals:
  Durango has specific rules for non-owner-occupied STRs in certain residential zones, aiming to prevent community disruption. If you do not live on-site, additional regulations may apply, such as distance requirements from other STRs or additional permit fees.

Licensing Requirements for Short-Term Rentals in Durango

Obtaining a license is essential for operating an STR legally in Durango. This process ensures the property meets safety standards and zoning regulations. Here’s a step-by-step guide to getting licensed:

• Application Process:
  Start by completing an STR license application through the City of Durango. The application will require information about the property, its layout, owner contact details, and compliance with local zoning laws. It may also ask for information on the maximum number of guests and parking arrangements.

• Safety and Health Inspections:
  Durango requires STRs to undergo safety inspections to ensure properties are safe for guests. Common inspections include checking smoke and carbon monoxide detectors, emergency exits, fire extinguishers, and general property safety. Properties must pass inspection to receive a license, so it’s essential to meet these requirements.

• License Renewal and Fees:
  STR licenses in Durango are typically renewable annually, with fees required to maintain compliance. The fee structure may vary based on your property’s location, zoning, and occupancy. Keep track of renewal dates to avoid unintentional lapses in licensing.

Tax Obligations for Durango Short-Term Rentals

In Durango, operating an STR means you’re responsible for collecting and remitting taxes on rental income. These tax requirements ensure that STRs contribute to the local economy, much like hotels and other accommodations. Here are the main taxes you’ll need to manage:

• Lodging Tax:
  As with other accommodations, short-term rentals in Durango are subject to a lodging tax. This tax is a percentage of the rental price and must be collected from guests at the time of booking. The exact rate may vary, so check with the city’s tax office for the current lodging tax rate.

• Sales Tax:
  In addition to the lodging tax, STR operators are also required to collect and remit sales tax on rental income. Sales tax rates include both state and local components. Be sure to set up your property’s booking system to calculate and collect these taxes automatically for seamless compliance.

• How to Remit Taxes:
  You can typically remit lodging and sales taxes through Durango’s online tax portal. Set up a schedule to submit taxes regularly, usually on a monthly or quarterly basis, depending on the volume of your bookings. Missing tax payments can result in penalties, so stay organized with tax filing reminders.

Key Compliance Tips to Avoid Fines and Penalties

Staying compliant with Durango’s STR regulations not only protects your rental income but also helps foster a positive relationship with the local community. Here are some essential tips to keep your rental in line with city requirements:

• Stay Informed on Regulation Changes:
  Durango’s STR regulations can evolve over time as the city works to balance community needs with STR growth. Subscribe to city newsletters or check the Durango website periodically to stay updated on any changes that might affect your rental.

• Clearly Communicate Rules to Guests:
  To avoid complaints and potential fines, make sure guests are aware of occupancy limits, parking rules, and any noise restrictions. A welcome book or digital guide with this information can be helpful for guests.

• Hire a Local Manager or Management Company:
  If you don’t live in Durango, hiring a local property manager ensures you’re compliant with local laws and can handle any issues promptly. Local managers are familiar with Durango’s STR regulations and can be on hand to address guest needs and compliance matters.

• Keep Documentation Organized:
  Maintain copies of your STR license, inspection reports, tax filings, and other essential documents. Organized records make renewals, audits, or inquiries from city officials easier to handle.

• Monitor Guest Reviews and Feedback:
  Keeping track of guest feedback can alert you to potential issues that may impact compliance, such as maintenance needs or safety concerns. Addressing these promptly ensures a safe, compliant rental.

Navigating short-term rental regulations in Durango may feel complex, but understanding these rules is essential to running a successful and legal rental. By familiarizing yourself with local zoning laws, licensing processes, and tax requirements, you’ll create a smoother experience for yourself, protect your property investment, and contribute positively to the Durango community. Following these guidelines will help ensure that your property remains compliant, safe, and attractive to guests throughout the year.