SANTA FE COUNTY, N.M. (KRQE) – It could be a big shift in how much some Santa Fe property owners pay in taxes. The county assessor is now looking into possible tax rate changes for those who own short-term rentals.
“It will drive us out of business. We will not be able to do it, and those are the reports that I’m hearing from many of our fellow short-term rentals throughout the city and county,” said Santa Fe County Short-Term Rental Fellowship Director Liz Emmens.
Emmens, a short-term rental owner, is among those worried about a shift in Santa Fe property taxes. The shift is a possible reclassification from residential to non-residential property for homes with short-term rentals. The Santa Fe County Assessor mentioned it is hard to decipher how much property taxes for short-term rental properties will go up in the city and county.
“What will it affect? You will be paying the non-residential rate, opposed to the residential rate which is higher. You will also lose the 3% limitation to evaluation as well because you are no longer deemed residential,” said Santa Fe County Assessor Isaiah Romero.
On November 1, Santa Fe County’s short-term rental owners will get a questionnaire from the county asking how they’re using their private property. If a property is found to be mostly used for short-term renting the county will consider changing a property’s tax status.
“You may have a guest house and a main house, and your main house you’re living in, but the guest house is a short-term rental. That’ll be a situation that we would be calling residential,” added Romero.
The assessor said his changes follow state statute which states residential property does not include temporary structures. The county assessor said these changes are being made because they are finally able to identify these properties as they now have to be licensed and registered.
However, the Santa Fe Association of Realtors said there are many worries property owners are raising.
“By moving these properties from residential to non-residential, that comes with some other concerns, including non-residential properties in a residential neighborhood being taxed differently. People’s loans and mortgages might be impacted. Their insurance on their properties might be impacted,” said Santa Fe Association of Realtors President Drew Lamprich.
Santa Fe County property owners have until February 29 to detail how they’re using their property. The county is expected to announce tax changes in April. Property owners who disagree will be allowed to appeal.
