Editor’s note: This story was updated on Nov. 17, 2025 to include the final results of voting on Vail’s short-term rental sales tax increase.
The Vail Town Council in 2024 set a goal to require more money from the town’s 2,600 short-term rentals to support attainable housing, joining dozens of Colorado communities leaning on STRs for revenue.
Vail voters rejected the plan. Early results for Ballot Issue 2A showing a slightly larger number of voters rejecting a 6% excise tax on rental income from short-term rentals to help pay for workforce housing. On Nov. 17, Eagle County finished counting and curing ballots and the lodging tax measure was defeated by 35 votes, with 916 “no” votes versus 881 “yes” votes.
The new tax would have raised the town’s lodging tax for short-term rental properties — not hotels — to 16.8%, up from 10.8%.
Town staff estimated the new tax would generate about $7.2 million a year to fund housing in and around town. The measure was supported by the town council and housing advocates and opposed by managers of condotels — condominium complexes with privately owned short-term rentals in a building that operates like a hotel — who argued they were being unfairly singled out by the proposal because traditional hotels were not subject to the tax.
Basalt leans toward higher lodging tax
On the other side of Eagle County, voters in Basalt embraced an increased lodging tax for affordable housing. Basalt’s Ballot Issue 3A proposed raising the town’s lodging tax to 6%, up from 4%.
By 9:30 p.m. on Nov. 4, with less than 40% of the Basalt votes counted, there were 799 votes supporting the measure and 353 votes against.
One common distinction made in the contentious hotel versus short-term rental debate involves property taxes. Commercial properties are assessed at 27.9% using a formula that includes the income potential of rented rooms. Residential properties are assessed at a rate of 6.7% based on market values, which have skyrocketed in the last five years.
It is not uncommon for residential properties to pay a higher effective tax rate based on what a buyer will pay for that property when compared to hotels paying taxes based on what the property earns.
The excise tax ballot question followed a proposal to impose a $1,200 per-bedroom annual fee on the 2,616 short-term rental properties in the town of Vail. Public comment and a survey by the town showed more support for a 6% excise tax.
The Vail Locals for Housing group formed to support 2A, calling the shortage of long-term rentals and the skyrocketing costs of homes in the Eagle River Valley “a public crisis.” The group raised $11,600, town records show.
The Vail Common Sense Housing Committee formed to oppose 2A, arguing the funding generated by the excise tax had too little oversight and could support projects outside of housing. The group raised several $1,000 contributions from local condotels and property managers and $30,000 on Oct. 15 from Airbnb. The group raised $69,500, according to town campaign finance records.
The town proposed using revenue from the tax for housing projects, including plans to spend $25 million for the purchase of new units at the renovated Timber Ridge project, developing a parcel of land in East Vail and supporting the town’s InDeed program. (Vail has paid 176 homeowners $12.7 million since 2017 to impose deed restrictions that require a sale or rental to a local worker at an affordable price.)
The town of Vail in May sold $189.2 million in housing revenue bonds to build 268 affordable housing units. The total interest cost of the 40-year bond debt for the housing project will be $366.7 million, if the town does not refinance that debt in 10 years.
The Colorado Short Term Rental Association opposed the Vail tax on vacation rentals, arguing that traditional hotels should be included in the effort to raise money for housing.
“Leaving other sectors of the lodging community out of this excise tax unfairly places the burden of funding workforce housing squarely on the shoulders of short-term rentals, with millions of dollars left on the table that could come from hotels, motels and other types of lodging,” reads a statement from the association.
It pointed to an October study by tech industry advocacy group Chamber of Progress showing $17.1 million in potential revenue if the 6% excise tax was applied to the 3,208 hotel rooms in Vail that draw $283 million in visitor spending a year.