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HB 1036

Local Taxes on Vacant Residential Property

2026 Regular Session

Allows Colorado municipalities to tax residential properties sitting vacant, aiming to boost housing supply and neighborhood stability through financial incentives for property use.

House Committee on Finance Postpone Indefinitely
#fiscalpolicy&taxes #localgovernment
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Bill Summary · HB 1036

Legislative bill overview

HB 1036 would authorize Colorado municipalities to impose local property taxes specifically on residential properties that remain vacant for extended periods. The bill aims to incentivize property owners to either occupy or productively use vacant residential units rather than holding them idle. This represents a new local taxing authority that would be optional for individual cities and counties to adopt.

Why is this important

Vacant residential properties can contribute to neighborhood blight, reduced property tax bases, and housing shortages in tight markets. A vacancy tax could incentivize property owners to sell, rent, or develop unused homes, potentially increasing housing supply and stabilizing neighborhoods. However, the actual impact depends heavily on tax rate design and whether it effectively motivates behavior change versus simply generating revenue.

Potential points of contention

  • Property rights concerns: Opponents may argue that taxing based on occupancy status constitutes an unusual property tax that punishes ownership while potentially benefiting speculators who can afford higher taxes
  • Definitional challenges: Disagreement likely over what qualifies as "vacant" (seasonal homes, properties undergoing renovation, legitimate investment holdings) and how long vacancy must persist before tax applies
  • Economic impact uncertainty: Questions about whether the tax rate needed to incentivize action would be high enough to be meaningful, or if it would unfairly burden legitimate investors and create administrative burden for municipalities

Compiled from official sources — confirm details with the bill’s official record.

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