Basalt’s Proposed Short-Term Rental Fee: What Homeowners Need to Know | Avant Garde Aspen Luxury Real Estate

The Town of Basalt, Colorado is carefully weighing its approach to short-term rental (STR) regulation, hoping to strike a balance between supporting local housing affordability and protecting responsible local homeowners who use short-term rentals to help offset the high cost of living in the Roaring Fork Valley.

A new proposal from the Basalt Town Council would introduce a $2,532-per-bedroom annual fee for STR license holders. Here's everything you need to know if you currently own or are considering buying a short-term rental property in Basalt.

💡 What Is the Basalt STR Regulatory Fee?

The proposed STR regulatory fee would apply to all short-term rentals within Basalt town limits. If passed, it would require STR license holders to pay $2,532 per bedroom per year, with proceeds supporting the town’s affordable housing initiatives.

This fee would be in addition to Basalt’s existing 3% sales tax and 4% lodging tax.

The Town Council unanimously approved the proposal on first reading on February 4, 2025. A final vote is scheduled for April 8, 2025, following further public input and data review.

🏠 Who Would Be Exempt?

In an effort to support local homeowners, the proposed policy includes an exemption for:

• STR license holders who use the property as their primary residence, and

• Rent the unit for 60 days or fewer per year

To qualify, license holders would submit an affidavit to the town verifying their primary residence status when applying for or renewing an STR license.

Mayor David Knight explained that the 60-day exemption window is designed to support homeowners who use short-term rentals “to make some money back” during peak seasons, without being full-time STR operators.

📊 Why the Fee? And How Was It Calculated?

In November 2024, the town commissioned Denver-based Economic and Planning Systems Inc. to conduct a study on STR regulation. The study recommended a maximum fee of $5,064 per bedroom based on occupancy rates, guest spending, and Basalt’s housing affordability gap.

After consulting with the Basalt Affordable Community Housing (BACH) group and the Planning Commission, the Town Council opted to set the fee at 50% of the maximum—$2,532—for now, with the possibility of adjusting it in future years.

The proposed fee could generate approximately $200,000 annually, which the town would dedicate to affordable housing programs and initiatives.

🔍 What Are the Concerns?

Some residents and council members have expressed concerns about potential unintended consequences:

• Councilor Ryan Slack emphasized the need for more data and comparisons to similar mountain towns before finalizing the fee.

• Town Finance Director Doug Pattison noted the difficulty in tracking rental activity, especially to determine which owners would qualify for the 60-day exemption.

• Local homeowners, like Jessica Portmess, worry the fee would unfairly penalize small-scale or lower-income STR operators who rely on the income to offset living costs, property taxes, or raise families in the valley.

Others questioned whether the relatively small number of current STRs—about 44 licensed units—can provide enough revenue or impact to move the needle on Basalt’s broader housing affordability challenges.

💬 A Delicate Balance

Councilors acknowledged the complex realities facing Basalt homeowners. Councilor Hannah Berman, the only renter on the council, supported allowing exceptions for locals, especially younger residents or families who depend on rental income to afford market-rate housing.

Councilor Rick Stevens highlighted how STR exemptions could help older residents manage increasing property taxes.

And Councilor Angèle Dupré-Butchart advocated for raising the annual fee, but expanding exemptions to allow more local households to benefit from short-term rental income without being penalized.

“If it’s your primary residence and you’re making the decision to short-term rent it, you’re doing that out of necessity,” she said. “Let’s expand the exemptions.”

⏳ What’s Next?

The Town Council has pushed the final vote to April 8, 2025, in order to gather more community feedback and refine the data on STR use, exemption eligibility, and fee impact.

If passed, this policy could become a key piece of Basalt’s broader affordable housing strategy, while setting a precedent for how small mountain towns manage the short-term rental economy in a sustainable and community-friendly way.

📍 Thinking About Investing in Basalt?

Whether you're a local homeowner thinking about turning part of your home into an STR, or an investor exploring Basalt's real estate market, it’s essential to understand how local regulations can affect your bottom line.

Reach out to Stephanie Kroll at Avant Garde Aspen for expert insight into:

• Navigating STR license requirements

• Understanding current and proposed fees

• Identifying properties ideal for part-time or full-time rental

• Exploring homes with accessory dwelling units (ADUs) or income potential