Property Management Taxes In Colorado

Updated August 7, 2026

11 min read

This guide covers the taxes that actually apply to a property management company operating in Colorado, and to the rental income it handles on behalf of owners. Every figure below is tied to the statute, agency rule, or published guidance that sets it, so you can confirm a rate or deadline before acting on it.

Sales Tax On Rent: What Applies And What Does Not

Colorado does not tax rent for real property. The Department states flatly that real property is not subject to Colorado sales tax, so leases of houses, apartments, and commercial space carry no sales tax. Short-term lodging is the exception: Colorado sales tax applies to the entire amount charged for rooms and accommodations, and a rental of a unit for less than 30 consecutive days is taxable. A written agreement for at least 30 consecutive days with a permanent resident exempts the stay. Home rule cities administer their own sales tax and are not bound by the state guidance.

The Department states plainly that 'Real property and intangible personal property are not subject to Colorado sales tax,' and that land and buildings are real property. Long-term residential rent and commercial rent therefore carry no Colorado sales, use, or excise tax. (Colorado Sales Tax Guide (May 2026), Non-taxable property and Real property)
Colorado imposes sales tax on the entire amount charged for rooms and accommodations. The tax applies to the furnishing of any regular sleeping room or unit that is part of a hotel, apartment hotel, inn, lodging house, guest house, motor hotel, motel, mobile home, dude ranch, or guest ranch, and to the furnishing of space in any auto camp, trailer court, or park. (Colorado Sales and Use Tax Topics: Rooms and Accommodations, Taxable rooms and accommodations)
Under certain circumstances the rental of rooms and accommodations to a permanent resident for a period of at least 30 consecutive days is exempt from sales tax. Any rental of a short-term lodging unit for less than 30 consecutive days is taxable and the operator must collect and remit sales tax. (Colorado Sales and Use Tax Topics: Rooms and Accommodations, overview)
Tax is imposed on any consideration for the use, possession, or right to use the rented room or space, and applies to the entire amount charged regardless of whether part of the charge is stated separately. A room cleaning charge is generally part of the charge for rooms and accommodations and is therefore taxable, as are separately stated charges for pools, spas, or health clubs accompanying the room charge. (Colorado Sales and Use Tax Topics: Rooms and Accommodations, Taxable charges)
The Department's lodging guidance applies to state, city, county, and special district sales taxes administered by the Department, as well as county lodging and local marketing district taxes administered by the Department, but it does not apply to any sales taxes administered by a home rule city. Managers with short-term rentals in home rule cities must check those cities' own rules. (Colorado Sales and Use Tax Topics: Rooms and Accommodations, scope)
Where sales tax is due on lodging, it is reported on the State and State-Administered Sales Tax Return (Form DR 0100), due the 20th day of the month following the filing period end date on a monthly, quarterly, annual, or seasonal cycle. County Lodging Tax is reported separately on Form DR 1485, due the 25th day of the month following the quarter. (Colorado Taxes and Fees Due Date Guide, Sales and Use Taxes)

Property Tax

County assessors value Colorado property and county treasurers collect the tax. Assessed value is actual value multiplied by an assessment rate that the Division of Property Taxation publishes and that has changed repeatedly. For 2026 the residential rate for local government mill levies is 6.8 percent applied after a 10 percent reduction of the first $700,000 of actual value, and the residential rate for school district mill levies is 7.05 percent. Taxes are payable in full by April 30 or in two installments due the last day of February and June 15. The senior exemption is owner-occupancy based and does not reach tenant-occupied rentals.

The 2026 Residential Local Government Assessment Rate is 6.8 percent after a 10 percent reduction of the first $700,000 in actual value, with a minimum of $1,000 in assessed value. (Colorado Division of Property Taxation, Residential Local Government Assessment Rate)
The 2026 Residential School Assessment Rate is 7.05 percent. The residential real property assessment rate in law for schools is 7.05 percent assuming a statewide growth rate under 5 percent, adjusted by a balancing percentage and, where needed, a correction percentage set by the State Board of Equalization. (Colorado Division of Property Taxation, Residential School Assessment Rate)
Colorado applies two different residential assessment rates to the same property, one for local government mill levies and one for school district mill levies, so an owner's bill blends both. The Division of Property Taxation publishes the current and historical rates. (Colorado Division of Property Taxation, Assessment Rates)
Beginning January 15, 2025 and each January 15 thereafter, Legislative Council Staff provides the State Board of Equalization with the information needed to calculate the school residential balancing percentage, and within 21 days the Board reports to the General Assembly and directs the Division of Property Taxation to publish the school residential assessment rate. That is why the school rate can move year to year. (Colorado Division of Property Taxation, Residential School Assessment Rate, State Board of Equalization responsibilities)
Property taxes are payable either in full on or before April 30 or in two equal installments, with the first half due the last day of February and the second half due June 15. County treasurers bill and collect. (Morgan County, Colorado, Property Tax FAQs, payment deadlines)
The senior property tax exemption does not apply to tenant occupied rentals. It requires that the applicant or their spouse be the owner of record for at least 10 consecutive years prior to January 1 and that the applicant occupy the property as their primary residence for at least 10 consecutive years prior to January 1. The exemption covers up to 50 percent of the first $200,000 of actual value. (Colorado Division of Property Taxation, Senior Property Tax Exemption, requirements)
The senior exemption application period runs from January 1 through July 15 each year and is filed with the county assessor, which is a date worth knowing when a manager takes over a property from an elderly owner who is moving out and converting the home to a rental. (Colorado Division of Property Taxation, Senior Property Tax Exemption, When to Apply)

Registration And Recordkeeping

A Colorado management company registers with several agencies: the Department of Revenue for withholding and, if it handles short-term lodging, for a sales tax license; the Division of Unemployment Insurance; and the FAMLI Division. Leasing and managing property for an owner is licensed real estate brokerage activity, and the Real Estate Commission requires transaction files be kept four years.

Property management services performed for an owner are activities under the real estate broker licensing statute. The Division of Real Estate defines property management services as the activities performed in leasing and subsequent management of a property on behalf of an owner pursuant to C.R.S. Section 12-10-201(6), and it is unlawful to engage in the business or capacity of real estate broker in Colorado without first obtaining a license from the Commission. (Colorado Real Estate Manual, Chapter 1: Real Estate Broker License Law; C.R.S. Section 12-10-201(6))
There is an owner exemption. Under C.R.S. Section 12-10-201(6)(b)(VII) a license is not required for a natural person acting personally with respect to property owned or leased by that person, or a natural person who is a general partner of a partnership, a manager of a limited liability company, or an owner of 20 percent or more of the entity that owns the property. (Colorado Real Estate Manual, Chapter 1; C.R.S. Section 12-10-201(6)(b)(VII))
Brokerage firms and brokers must retain transaction files for four years, beginning from the consummation date of the transaction or the expiration date of any listing contract that does not consummate. Files may be kept in hard copy or electronic format so long as they can be inspected during the four year retention period. (Colorado Division of Real Estate, Transaction File Requirements and Retention; C.R.S. Section 12-10-217(1)(k) and CREC Rule 6.20)
Any employer subject to Colorado wage withholding must register with the Colorado Department of Revenue before withholding. (Colorado Withholding Tax Guide, Colorado wage withholding requirements)
All businesses with at least one qualified employee are required to register with the FAMLI Division in My FAMLI+ Employer. (Colorado FAMLI Division, Employers)
Sales tax licensing and collection requirements apply to any retailer making retail sales of tangible personal property or taxable services in Colorado, which reaches a manager operating taxable short-term lodging. A retailer who maintains a place of business in Colorado is subject to all Colorado sales tax licensing and collection requirements for as long as it maintains that place of business. (Colorado Sales Tax Guide (May 2026), sales tax licensing and collection requirements)

Recent Changes Worth Tracking

Effective January 1, 2026: The 2026 unemployment insurance chargeable wage base increased to $30,600, up from $27,200 in 2025. (Colorado Department of Labor and Employment, Premium Rates, 2026 Chargeable Wage Base)
Effective Property tax year 2026: The 2026 residential assessment rate for local government mill levies is 6.8 percent applied after a 10 percent reduction of the first $700,000 in actual value, with a minimum of $1,000 in assessed value. The 2026 residential assessment rate for school district mill levies is 7.05 percent. (Colorado Division of Property Taxation, Residential Local Government Assessment Rate and Residential School Assessment Rate)
Effective Tax year 2025: The Colorado income tax rate returned to 4.4 percent for tax year 2025 after having been temporarily reduced to 4.25 percent for tax year 2024. (Colorado Individual Income Tax Guide, Colorado Income Tax Rates table)
Effective Payments made after December 31, 2025: Federal change affecting every Colorado management company: the Form 1099-NEC and 1099-MISC reporting threshold rose from $600 to $2,000 for payments made after December 31, 2025, with inflation adjustment beginning in calendar year 2027. (IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), What's New)

Tax is one half of Colorado compliance. See our guide to Colorado property management laws and regulations for licensing, trust account, and disclosure rules.

This page is one half of the picture. See our guide to how Colorado taxes rental and management income for the rest.

Keeping This Straight

Tax rates and thresholds move more often than most operators expect, and the figures circulating in older articles go stale quickly. Check any rate against its citation before you quote it to an owner, and re-check them at the start of each tax year.

This guide is a starting point for professional managers, not tax or legal advice. For a specific filing, work with a CPA familiar with Colorado rental property, and confirm current figures with the Colorado Department of Revenue or the IRS.