Audit of Breckenridge’s short-term rentals finds 65 violations, 98 percent compliance rate
Short-term rental fees
The owner of an accommodation unit that is rented out on a short-term basis is required to purchase a license from the town of Breckenridge. The annual fees for is based on the number of bedrooms or units in a house. The fee schedule is as follows:
Unit type Fee
One bedroom $100
Two bedrooms $150
Four or more bedrooms $175
Source: Town of Breckenridge
After passing a town ordinance to help rein in short-term rentals earlier this year, Breckenridge elected officials are applauding the results of a new survey showing almost every short-term rental property is complying with town rules and remitting the proper taxes.
“The town of Breckenridge has been successful in our efforts for licensing compliance of our short-term rentals,” Councilwoman Elisabeth Lawrence said of the survey’s results.
“After our recent audit, more than 98 percent of accommodation units in the town of Breckenridge were licensed and remitting the proper sales tax revenue,” she continued. “This is a win for the town and assures us that we are on the right track.”
In June, Breckenridge began requiring short-term rentals to post their corresponding business license numbers in all their advertisements, whether those ads be in a newspaper, magazine, brochure, telephone recording or online, like AIRBnB.com or VRBO.com.
The move was supposed to help town staff better know which properties are following the rules and which ones aren’t based on the ads that promote them.
As council was voting on the new advertising rules for short-term rentals last May, town staff said they didn’t believe there were too many scofflaws out there but a small percentage of short-term rentals might be operating in violation of the town’s licensing and tax requirements, including failing to remit the 3.4 percent tax on short-term lodging accommodations back to the town.
At the time, Breckenridge director of finance Brian Waldes guessed that, based on his experience, as many as 98-99 percent of property owners were probably following the rules.
Still, he felt like the town owed it to those owners who were doing right to seek out the ones who weren’t to ensure everyone is operating on a “level playing field.”
As it turns out, Waldes was spot on with his estimate because, according to a Dec. 6 memo from revenue services administrator Heather Pezzella to Town Council, only 1.8 percent of the short-term rental units discovered to be operating in Breckenridge were found to be in violation.
In taking steps to monitor short-term rental properties, according to the memo, Breckenridge was able to identify 3,526 short-term accommodation units altogether, a number that is “increasing daily.”
Out of those units, 76 were deemed “potentially unlicensed,” according to the memo, and upon further review, the town confirmed 65 of those were operating unlicensed and not remitting the proper taxes.
“As anticipated, the town has a high level of compliance,” Pezzella told council in the memo, adding that most of the units discovered to be in violation were owner-managed, and the town was able to find the owners and their addresses.
Additionally, one of those units found to be in violation of the town’s short-term renting rules was a deed-restricted property, which raises a host of other issues because those units are generally reserved only for people who work in the county and aren’t supposed to be rented out.
The memo also lists the penalties for potential violations. The owner of an unlicensed short-term rental property, for example, could have to pay the licensing fee, plus a 10 percent penalty, along with a fine of up to $500, to be determined by a municipal judge.
Also, advertising a short-term rental without a license number could end in a fine of $200 to $1,000 per day, again to be determined by a judge.
The next step for the town is to send out letters notifying the property owners discovered to be in violation while assessing any past due sales taxes.
Shortly after the advertising change for short-term rentals was approved, according to the memo, town staff took a proactive approach to educating property owners about the new requirement, sending out numerous letters and other forms to property owners.
“We believe this high compliance rate is party the result of our significant proactive education and outreach efforts in this area,” Pezzella noted in her memo.
The town’s finance department then used the information that was returned to update its records with the correct contact and property management information, local emergency contacts, as well as any AIRBnB or VRBO listing numbers.
At the same time, the town’s website was revamped with a new short-term rental landing page — TownOfBreckenridge.com/shortterm — along with a complaint form, FAQs and links to important licensing and tax information.