Thinking about listing a home in Colorado Springs, or converting an existing rental for higher yield? The right strategy starts with the rules. Colorado Springs treats short term rentals as a distinct use, with requirements that affect where you can host, how often you can rent, and what it costs to stay compliant. Missteps can trigger fines or license denials. This analysis explains colorado springs short term rental laws in plain terms, then shows how to align your operating plan with city priorities.
You will learn the core zoning distinctions, including primary residence standards and limits on non owner occupied listings. We will cover licensing steps, fees, inspections, occupancy and parking rules, tax obligations, and noise and nuisance expectations. We will flag HOA and condo considerations, advertising rules, and the penalties the city applies. You will also see how city regulations differ from unincorporated El Paso County rules, and what policy changes are on the horizon. Finally, you will get a practical checklist to evaluate a property, estimate compliance costs, and de risk your portfolio before you buy or list.
Current State of STRs in Colorado Springs
Market and regulatory snapshot
Colorado Springs short term rental laws regulate STRs through owner-occupied and non-owner-occupied categories. Since late 2019, new non-owner units are prohibited in single-family zones and must sit at least 500 feet from another non-owner in other districts; operators must follow occupancy of two guests per bedroom plus two, capped at fifteen, post occupancy and parking information, hold a one-year license, and maintain a 24 hour contact who can respond within one hour, as outlined in the City of Colorado Springs STR rules. Fees and taxes matter to underwriting: the current application fee is about 124.95 dollars, and hosts must collect a 3.12 percent city sales tax and a 2 percent lodging tax, per this Colorado STR licensing and taxes overview. City Council is considering additional constraints, so prudent operators underwrite as if spacing or enforcement could tighten and they document compliance audit trails from day one. Demand fundamentals remain attractive, with roughly 24.8 million Pikes Peak visitors in 2023, up 3.3 percent, average occupancy near 68 percent, ADR around 125 dollars, and typical annual STR revenue close to 39,000 dollars by 2025, although managers report softer demand into 2026 and 200 to 400 dollar rent cuts during 2025. Stakeholders shaping outcomes include planning and code officials, neighborhood associations, professional hosts and managers, and statewide policymakers debating higher vacation-home taxes, while resort overlay zones elsewhere show how rules can expand inventory; actionably, map 500 foot buffers pre-acquisition, pressure test pricing to lower occupancy scenarios, budget for local taxes and renewals, monitor updates via the Colorado Springs STR portal, and use Staystra’s dashboards to benchmark ADR, occupancy, and policy risk.
Regulations Affecting STR Operators
Local permits and licensing
Operating under Colorado Springs short term rental laws begins with a city STR permit. Applications distinguish owner occupied and non owner occupied units, with owner occupied status requiring the home to be your primary residence for most of the year and documentation to match. New non owner permits are not allowed in single family zones for applications filed after December 2019, and in other zones a 500 foot spacing rule from the next non owner STR applies. Operators must also post maximum occupancy, provide adequate off street parking, and list a 24 hour contact able to respond within one hour. Overnight occupancy is capped at two guests per bedroom plus two, up to a maximum of 15. The city’s program page details these standards, see Short Term Rentals, City of Colorado Springs.
Sales tax licensing and remittance
STR operators are responsible for collecting and remitting Colorado state, county, city, and lodging taxes. The combined burden in Colorado Springs is roughly 11.4 percent, including a 4.2 percent lodging tax, as summarized in this local STR tax guide. If your listing platform collects and remits some taxes, you may still need a City Sales Tax License to cover any gaps, so verify platform coverage in writing and keep records. Practical steps include registering the property with the city and state, mapping your filing cadence to seasonality, and testing your pricing to maintain margin after tax.
Recent legislative changes
Two statewide measures are material. HB24 1299 reclassifies many non owner occupied STRs as lodging property for assessment beginning January 1, 2026, which can raise the effective property tax versus residential rates. HB23 1287 clarifies county authority to license STRs and to require license numbers on listings, so audit your advertising for compliance and retain documentation; for local document requirements, see the city’s STR application checklist. Locally, the City Council has weighed tighter restrictions, and with rental demand trending below 2020 to 2023 levels, plan scenarios for higher taxes, spacing limits, and softer occupancy. For ongoing city by city updates and data driven planning tools, track market signals with Staystra at https://staystra.com.
Permit Types and Processes
Owner-occupied vs non-owner-occupied permits
Colorado Springs administers two permit classes that determine where and how you can operate. Owner-occupied permits require the owner to reside in the dwelling at least 185 days per year. These units are broadly eligible in residential zones that allow dwellings, which gives owner-operators more siting flexibility. Non-owner-occupied permits apply when the residency threshold is not met. For applications submitted after December 26, 2019, non-owner-occupied STRs are prohibited in single-family zones such as R-E, R-1 6, R-1 9, and Single-Family PDZs, and in eligible multifamily or commercial districts they must be at least 500 feet from another non-owner STR. A limited military exemption can temporarily waive the occupancy requirement for active duty service members. For a statewide frame of reference on how local rules interact with property rights, see the Colorado Lawyer overview of STR regulation.
How to apply and renew annually
Applications are submitted through the city’s online system and must include a notarized affidavit confirming owner-occupancy status, proof of primary residence when applicable, and liability insurance of at least 500,000 dollars. The annual permit fee is 124.95 dollars, and the permit is valid for one year from issuance. Renewal notices typically arrive about 30 days before expiration; renewals require reattestation of eligibility and payment of a 119 dollar fee. There is no grace period, so an expired permit risks code enforcement and, for non-owner-occupied units, potential forfeiture if a nearby property secures a permit first under the 500-foot spacing rule. Practical tip: set calendar alerts at 60 and 30 days pre-expiration, and keep proof-of-residency and insurance documents current to avoid processing delays.
Fees and the impact of owner occupancy
Fee schedules are uniform across permit types, so occupancy status does not change the city fee. The real cost divergence is operational. Non-owner operators face siting limits, spacing buffers, and single-family zone bans, which can push acquisitions into narrower submarkets and increase due diligence costs. For example, a condo 350 feet from a licensed non-owner STR will not qualify, which may divert investment to less competitive tracts. Monitor potential rule changes, since City Council has weighed tighter limits on vacation rentals, as reported by local advocates in this policy update on proposed restrictions. To track permit density, renewal timing, and neighborhood eligibility with live datasets, use Staystra’s Colorado Springs compliance tools, then align underwriting with current colorado springs short term rental laws.
Financial and Tax Obligations
Overview of applicable sales and lodging taxes
Colorado Springs short term rental laws require hosts to collect multiple layers of taxes on stays under 30 consecutive days. At the state level, Colorado imposes a 2.9 percent sales tax on the full price of lodging, which includes cleaning fees and other mandatory charges, as outlined in the state’s lodging guidance Colorado state sales tax guidance on lodging. The city also levies a 2.75 percent Lodgers and Automobile Rental Tax, which funds local tourism programs Colorado Springs Lodgers and Automobile Rental Tax details. Depending on your exact location, additional county or municipal sales taxes may apply, and Colorado’s home rule structure means local rates and filing portals can differ. Given rapid policy churn, including numerous state bills affecting rentals in 2025, operators should verify rates and filing requirements before each filing period.
Methods for collecting and remitting taxes properly
Obtain the required state and city tax licenses before accepting bookings, then configure your booking channels to itemize each tax line separately. Remit state and any county tax through the Colorado Department of Revenue on the cadence assigned to your account, commonly monthly or quarterly, and remit LART directly to the city per its schedule. Do not assume a booking platform is covering every jurisdiction; confirm which taxes are collected on your behalf and file any remaining obligations yourself. As a simple illustration, a 2-night, 1,000 dollar gross booking would require collecting 2.9 percent state sales tax and 2.75 percent LART, or 56.50 dollars total, not including any additional local sales tax that may apply. Use calendar reminders, a dedicated tax liability bank subaccount, and prefilled returns to avoid late penalties.
Importance of maintaining accurate financial records
Maintain a daily transaction ledger that ties each booking to gross rent, taxable fees, exempt amounts for 30-plus day stays, and each tax line collected. Reconcile payouts and deposits to platform statements and bank records monthly, then match those to filed returns to create an audit trail. Retain invoices, guest folios, exemption documentation, and filed returns for at least three years, which aligns with typical audit lookback periods. Produce monthly P&L and occupancy reports so you can benchmark tax burden as a percentage of revenue and adjust pricing if margins compress. For updated Colorado Springs tax changes and filing checklists, see the data resources on the Staystra Research Hub.
Challenges and Opportunities for STR Operators
Increased regulatory scrutiny and its implications
Colorado Springs has tightened oversight to align neighborhood expectations with operator accountability. Licenses, safety postings, and operating standards are enforced through the city’s short term rental checklist, which codifies occupancy limits of two per bedroom plus two, capped at 15, and requires parking plans that prioritize on-site spaces. The city distinguishes owner-occupied properties, where the owner resides at least 185 days per year, from non-owner-occupied units that face spacing limits of 500 feet from another non-owner STR and are largely excluded from single-family zones for permits submitted after late 2019. Practically, these rules create location scarcity that raises the value of compliant, well-sited assets and penalizes ad hoc expansion. Operators should treat compliance as an operating system: maintain a digital permit binder, post house rules, keep guest count logs, and institute neighbor communication protocols. Expect targeted enforcement and potential fines for unlicensed activity, so periodic self-audits and documented staff training are risk reducers under colorado springs short term rental laws.
Potential restriction ordinances by City Council
Policy momentum did not stop with 2023’s Unified Development Code update, which consolidated zoning standards under RetoolCOS. In April 2025, City Council authorized citywide ADUs for single-family lots, but prohibited their use as STRs, a clear signal that near-term supply growth will favor long-term housing. Council has also discussed additional restrictions, including caps, expanded spacing, and tighter non-owner pathways. Given statewide velocity, with 15 bills affecting landlord-tenant law in 2025, operators should model timelines for potential changes, such as 3 to 6 months for notice and implementation. Action items include monitoring agendas, preparing public comment, and stress-testing underwriting that excludes ADU revenue and assumes permit attrition or renewal risk.
Opportunities from changing laws and market trends
Regulatory clarity can be an advantage for disciplined operators. With rental demand in Colorado Springs trending below 2020 to 2023 levels, and some landlords cutting asking rents by 200 to 400 dollars in 2025, STR operators can lean into differentiated value, such as family-friendly amenities, verified compliance, and quiet-hours tech. Consider diversifying toward owner-occupied configurations, mid-term travel nurse or project stays, and permitted multifamily or mixed-use zones. Monitor adjacent markets for countervailing trends, such as resort overlays where new licenses increased active STRs in Summit County this season. Use Staystra to track ordinance changes, map permissible geographies, and benchmark pricing so your portfolio stays compliant, resilient, and ahead of policy shifts.
Maximizing Success with Staystra.com
Real-time regulatory intelligence
Colorado Springs short term rental laws shift through council votes, staff bulletins, and enforcement priorities. Staystra.com aggregates agendas and draft ordinances, then converts them into plain-English alerts so you see changes early. When a proposal to tighten spacing or curb non owner occupied permits appears, Staystra flags timelines, likely vote windows, and action items. With 15 rental related bills filed statewide in 2025 and ongoing debate over higher taxes on vacation properties, the bill tracker maps effective dates and renewal impacts. Hosts use this to schedule filings and budget for the 11.4 percent lodging tax.
Management tactics grounded in data
Regulatory compliance is necessary, yet performance depends on execution. Drawing on local indicators, including softer rental demand entering 2026 and widespread 200 to 400 dollar concessions in 2025, Staystra translates macro signals into concrete plays. Recommended tests include 5 to 8 percent shoulder season price adjustments, midweek length of stay discounts, and inventory tagging to verify on site parking, which city rules require. A guided audit walks hosts through updating occupancy signage, house manuals, and guest messaging to cut complaint risk. These moves stabilize occupancy while protecting average daily rate when demand is choppy.
Strategy and scenario planning
Strategic planning benefits from a statewide lens. New licenses in resort overlay zones boosted active STR counts in Summit County in 2024, signaling supply pressure there, while Colorado Springs faces potential tightening instead. Staystra’s analyzer lets you compare owner occupied configurations with non owner models under different spacing or cap scenarios, and project RevPAR sensitivity. Users can test three night minimums during events, shift cleaning fees into nightly rates, and model a 1 to 2 percent tax change. Clear go or no go rules keep acquisitions and conversions disciplined.
Conclusion and Actionable Insights
Key takeaways and implications
Colorado Springs short term rental laws center on owner-occupied vs non-owner-occupied permits, plus operational rules like posted maximum occupancy and adequate parking. City Council is weighing an ordinance that could severely restrict inventory, so compliance risk is rising. Elsewhere, new licenses in resort overlay zones increased active STRs in Summit County, while many mountain towns intensify caps and taxes. The city enters 2026 with reduced rental demand compared to 2020 to 2023, and 15 new bills in 2025 plus tax proposals compress margins.
Actionable steps for Colorado Springs operators
Run a 30-day compliance audit, confirm permit class eligibility, refresh occupancy signage, document off-street parking, and reconcile all sales and lodging tax accounts for stays under 30 days. Build two downside scenarios, for example tighter spacing or primary residence rules, then calculate breakeven ADR and occupancy under each. Adjust pricing to slower demand using targeted promotions and value adds; when necessary, treat the 200 to 400 dollar reductions observed in 2025 as an upper bound to protect ADR. Engage in public comment on pending ordinances, monitor property tax changes, maintain neighbor-friendly operations, and use Staystra.com for ordinance tracking, demand indicators, and scenario planning templates.
