Granby Ranch HOA (Colorado) just added a 2.7% surcharge on STRs

[Christina B.]

Not sure how many here will be affected by this but it adds to the tougher landscape for STRs in the mountains. This was pushed through in the last meeting (no vote) by the Board of Directors and will commence January 2025. It's a 2.7% tax on gross amount of all retail and food sales and they specifically mention STRs. Owners are supposed to certify to the Board if no sales were generated in any particular month, as well as provide a copy of any Colorado sales tax return or alternatively, a report from AirBnB or VRBO regarding the sales for that month.

I find this invasive, crappy, and a whole lot more that shouldn't be said in polite company. It's making seasonal, MTR, and LTR a lot more attractive or a 1031 exchange as soon as we hit the 2 year mark.

Anyone else seeing this in their part of the country? Thoughts?

[Dave Foster]

@Christina B., Sorry to see that even Grand County is being infected with the tax to pay for things virus!!

Depending on how it shakes out you still might want to consider a 1031 exchange at any time.  when buying this property you had to have had the intent of holding for investment use.  There can always be things that cause you to change that intent.  and this new tax is a perfect example of one of those unforseen events.  You bought intending to hold.  But something is now causing you to change that intent.  

That's a common 1031 scenario.  Given that there is no statutory holding period.  Only your intent and how you can demonstrate it.  And it sounds like you've already owned it across two tax and calendar years.  So the use of that property will appear on two consecutive tax returns.  And since that is the only way the IRS looks at us is through the lens of your tax return.  That is two years in IRS world.  Generally any hold of more than a year is considered routinely safe.