Colorado Springs CO Short Term Rental Regulations: A Rocky Mountain Investment Roadmap

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Disclaimer: This article is for informational purposes only and not legal advice. Regulations may have changed since publication. Always check with local authorities and consult a legal professional before making investment decisions.

Introduction to Short-Term Rentals in Colorado Springs

Colorado Springs offers one of the most compelling short-term rental markets in the Rocky Mountain region. With its proximity to Pikes Peak, Garden of the Gods, and the U.S. Air Force Academy, this vibrant city attracts millions of visitors annually seeking outdoor adventures, military events, and mountain escapes.

The STR market in Colorado Springs has evolved significantly since the city implemented comprehensive regulations in 2019. Unlike some Colorado mountain towns that have imposed strict caps or bans, Colorado Springs has created a structured framework that balances investor opportunities with neighborhood protection.

What makes Colorado Springs particularly attractive for STR investors is its year-round appeal. Summer brings hiking enthusiasts and tourists to the region’s iconic landmarks, while winter offers skiing nearby and holiday travelers. The city’s diverse economy, anchored by military installations and the tech sector, creates steady demand from both leisure and business travelers.

However, Colorado Springs’ regulations are more nuanced than many markets, with different rules for owner-occupied versus non-owner-occupied properties. Understanding these distinctions is crucial for making profitable investment decisions in this thriving Rocky Mountain destination.

This comprehensive guide breaks down everything you need to know about operating a legal and profitable short-term rental in Colorado Springs in 2025.

Current Short-Term Rental Permit Requirements in Colorado Springs

Colorado Springs requires all short-term rental operators to obtain a permit, with the current annual cost being $124.95. The city operates under a two-tier system established in December 2019.

Owner-Occupied Short-Term Rentals

Owner-occupied STRs are defined as properties physically occupied by the owner for no less than 185 days per year. Key requirements include:

1. Primary Residence Verification: Must provide proof of primary residence through two of the following:
   • Valid driver’s license or State ID Card
   • Valid vehicle registration
   • Voter registration
   • Dependent’s school registration
2. Zoning Flexibility: Allowed in lawful dwelling units in zones where residential units are permitted
3. No Numerical Limits: There is no limit to the number of owner-occupied short term rentals residents can operate
4. Military Exception: Active duty military service members whose permanent duty station is within El Paso County can receive a waiver for up to one year if they receive orders to report to a temporary duty station outside of El Paso County

Non-Owner Occupied Short-Term Rentals

Non-owner occupied STRs face more restrictions:

1. Zoning Limitations: Not permitted in single-family zoning districts including R-E, R-1 6, R-1 9, and Single-Family PDZs
2. Distance Requirements: Must be 500 feet from another non-owner occupied short term rental unit in all other zoning districts
3. Application Timing: Applications submitted after December 26, 2019 are subject to these additional requirements

Application Process

The Planning Department utilizes an electronic process for all permits, application submittals, payments, and reviews. Required documentation includes:

• Completed Short Term Rental Checklist and Owner Acknowledgment (4 pages)
• Proof of ownership or legal right to operate
• Floor plan of the rental space
• Emergency contact information (24-hour availability required)
• Sales tax license (if not using marketplace facilitators)

Permits are valid for one year, and failure to renew prior to expiration may result in Code Enforcement notices and potential permit forfeiture for non-owner occupied properties.

Zoning Regulations for STRs in Colorado Springs

Understanding zoning is critical for Colorado Springs STR investments:

Permitted Zones for Owner-Occupied STRs

Owner-occupied STRs enjoy broad zoning flexibility and are generally allowed in most residential zones where dwelling units are permitted.

Restricted Zones for Non-Owner Occupied STRs

Non-owner occupied STRs are prohibited in single-family zoning districts including R-E (Residential Estate), R-1 6, R-1 9, and Single-Family PDZs (Planned Development Zones).

Non-owner occupied STRs are generally permitted in:

• Multi-family residential zones
• Mixed-use districts
• Commercial zones
• Some planned development zones (with restrictions)

Research Tools

Property owners can find their zoning by visiting Springsview and using the zoning map tool. For accessibility requests or additional assistance, contact the Planning Department at (719) 385-5905.

Distance Requirements

The 500-foot separation requirement for non-owner occupied STRs significantly impacts investment opportunities in popular residential neighborhoods. Questions about the 500-foot buffer can be sent to shorttermrentals@coloradosprings.gov.

Required Documentation for Colorado Springs Short-Term Rentals

To operate legally, maintain these essential documents:

1. Annual STR Permit: Current permit displayed in property and available digitally
2. Sales Tax License: Required unless using marketplace facilitators like Airbnb or VRBO
3. Proof of Primary Residence (owner-occupied only): Two forms of documentation proving 185+ day occupancy
4. Emergency Contact Information: 24-hour point of contact who can respond within 1 hour in case of emergency
5. Liability Insurance: Minimum $500,000 coverage unless hosting platform provides equal or higher coverage
6. Floor Plan: Detailed layout of the rental space
7. Compliance Records: Documentation showing adherence to all city codes and ordinances
8. Occupancy Documentation: Maximum overnight occupancy limited to two occupants per bedroom, plus an additional two occupants per dwelling unit, with a maximum of 15 occupants per property

Well-organized documentation streamlines renewals and demonstrates compliance during inspections or enforcement actions.

Colorado Springs Short-Term Rental Taxes

The tax structure for STRs in Colorado Springs involves multiple layers:

City Sales Tax

The City of Colorado Springs sales and use tax rate is 3.07% effective January 1, 2021. The combined sales tax rate for Colorado Springs is 8.20%, which includes:

• Colorado state sales tax: 2.9%
• El Paso County tax: 1.23%
• City of Colorado Springs tax: 3.07%
• Regional Transportation Authority: 1.0%

Collection Methods

All marketplace facilitators (i.e., Airbnb, VRBO, Expedia, etc.) are required to collect and remit the City of Colorado Springs sales tax on their own licenses. However, if the permit holder does not utilize a marketplace facilitator and books on their own, they will need to obtain a City Sales Tax License.

Tax Compliance Requirements

All taxes owed to the City shall be remitted prior to the issuance of the STR permit. Key requirements include:

• Monthly or quarterly filing depending on volume
• Online filing through Colorado Department of Revenue portal
• Proper record keeping for three years minimum
• Separate business tax license registration

Additional Tax Considerations

Colorado also imposes state-level taxes and various local lodging taxes that may apply depending on specific location within Colorado Springs and El Paso County.

Safety Requirements and Inspections

Colorado Springs maintains comprehensive safety standards for STR properties:

Required Safety Equipment

Properties must pass safety inspections to ensure compliance with building codes, including functioning smoke detectors, carbon monoxide detectors, and fire extinguishers.

Specific requirements include:

• Smoke detectors on each level and in each bedroom
• Carbon monoxide detectors on each level and near fuel-burning appliances
• Fire extinguishers on each level
• Emergency exit plans posted and exits clearly marked
• Address prominently displayed for emergency services

Building Code Compliance

Properties must remain compliant with all planning, zoning, building, and other City codes. This includes:

• Structural integrity standards
• Electrical code compliance
• Plumbing system adequacy
• HVAC system functionality
• Accessibility requirements where applicable

Fire Department Oversight

The fire department performs fire inspections for business licenses, complaints of code violations, and requested inspections. To request an inspection, call 385-5978.

Ongoing Safety Obligations

All short term rentals shall abide by all applicable noise, housing, and public health ordinances of the city and with all other City fire and safety ordinances.

Colorado Springs vs. Surrounding Areas: Regulation Comparison

How do Colorado Springs’ regulations compare to other Colorado markets?

Denver

• Only primary residences allowed as STRs
• Complete prohibition on non-owner occupied rentals
• $100 annual license fee
• Higher combined tax rates (10.75% lodger’s tax + 4.81% sales tax)

Boulder

• Extremely restrictive with primary residence requirements
• Limited to owner-occupied only
• Complex permitting process
• Higher fees and taxes

Fort Collins

• Similar two-tier system (primary vs. non-primary)
• More restrictive zoning limitations
• 3% lodging tax plus sales tax
• Stricter occupancy limits

Mountain Towns (Steamboat, Aspen, Vail)

• Many have implemented caps or moratoriums
• Extremely high permit fees (often $1,000+)
• Complex overlay zoning systems
• Some markets phasing out non-owner occupied rentals

Colorado Springs Advantages

• No cap on the total number of short term rentals being approved
• Reasonable annual permit fee of $124.95
• Clear regulatory framework with defined processes
• Accommodation for both owner-occupied and non-owner occupied rentals (with restrictions)
• No waiting list for non-owner occupied permits

Colorado Springs offers a more balanced approach compared to many Colorado markets that have become increasingly restrictive.

Enforcement of STR Rules in Colorado Springs

Understanding enforcement helps assess compliance risks:

Monitoring and Detection

Residents can check if properties have permits by using the city map on Springs View, clicking “show layer list” and ensuring “Short Term Rentals” is checked under “Planning-Administration”.

Complaint Process

For non-life threatening issues, including loud parties, residents should call the police non-emergency line at 719-444-7000. If a permit does not show up on Springs View, residents can contact the City’s Neighborhood Services Division (Code Enforcement) or submit a report online.

Common Violations

The most frequent issues include:

• Operating without a valid permit
• Exceeding occupancy limits (15-person maximum)
• Tax compliance failures
• Noise ordinance violations
• Failure to maintain 24-hour emergency contact
• Operating non-owner occupied STRs in prohibited zones
• Not maintaining required distance buffers

Penalties

Violations can result in:

• Code enforcement citations and fines
• Permit suspension or revocation
• Prohibition from obtaining future permits
• Potential forfeiture of established permit for non-owner occupied properties that fail to renew on time

Enforcement Philosophy

Colorado Springs takes a structured approach to enforcement, focusing on education and compliance assistance while maintaining firm consequences for repeated violations.

How to Start a Short-Term Rental Business in Colorado Springs

Follow this roadmap to launch your Colorado Springs STR:

Step 1: Market Research & Investment Strategy

• Determine if you want owner-occupied or non-owner occupied operation
• Research neighborhood zoning and STR density
• Analyze seasonal demand patterns (summer tourism, winter sports, military events)
• Evaluate proximity to major attractions (Pikes Peak, Garden of the Gods, downtown)

Step 2: Property Selection & Zoning Verification

• Use Springsview to verify property zoning and existing STR permits
• For non-owner occupied, confirm property is outside restricted single-family zones
• Verify 500-foot distance requirement compliance for non-owner occupied
• Consider accessibility to outdoor activities and downtown attractions

Step 3: Permit Application Process

• Create an account through the city’s electronic submission system
• Gather required documentation (ownership proof, floor plans, emergency contact)
• Complete Short Term Rental Checklist and Owner Acknowledgment
• Submit application with $124.95 annual fee
• For questions, call 719-385-5905 or email shorttermrentals@coloradosprings.gov

Step 4: Business Setup & Tax Registration

• Obtain sales tax license if not using marketplace facilitators
• Set up business entity (LLC recommended for liability protection)
• Secure minimum $500,000 liability insurance
• Establish 24-hour emergency contact system

Step 5: Property Preparation

• Install required safety equipment (smoke/CO detectors, fire extinguishers)
• Ensure compliance with building and fire codes
• Create mountain-themed, comfortable accommodations
• Establish weekly residential trash collection services
• Set up reliable high-speed internet for guests

Step 6: Operations Launch

• Create compelling listings highlighting Colorado Springs attractions
• Display permit number on all advertisements and listings
• Establish cleaning and maintenance protocols
• Develop house rules emphasizing noise and occupancy limits
• Create comprehensive guest guide to local attractions and regulations

Step 7: Ongoing Compliance

• Renew permit annually before expiration
• File tax returns and remit collected taxes timely
• Maintain required insurance coverage
• Respond promptly to neighbor or guest concerns
• Stay updated on regulatory changes

Advice from Successful Colorado Springs STR Operators

Insights from experienced Colorado Springs vacation rental owners:

“The key to success in Colorado Springs is understanding your market. Summer guests want hiking and outdoor adventure amenities, while winter visitors appreciate cozy indoor spaces and easy access to ski areas. We’ve found that properties within 15 minutes of Garden of the Gods consistently outperform.” – Sarah M., owner of 4 Colorado Springs STRs

“Don’t underestimate the compliance requirements. The 185-day owner occupancy rule for the primary residence category is strictly enforced, and you need solid documentation. We keep detailed records of our occupancy and have backup documentation ready.” – Mike R., Colorado Springs property manager

“The military market is huge here but often overlooked. We’ve specialized in serving families during PCS moves and graduation events at the Air Force Academy. These guests tend to stay longer and treat properties very well.” – Jennifer L., 3-year STR investor

“Location matters more than amenities in Colorado Springs. A basic property with mountain views and proximity to attractions will outperform a luxury property in a remote location. Focus your investment on neighborhoods that offer the Colorado experience guests are seeking.” – David K., real estate investor with 6 properties

The consensus among successful operators is that Colorado Springs rewards those who understand the outdoor recreation market, maintain strict compliance, and provide authentic Colorado experiences.

Who to Contact About Colorado Springs STR Regulations

For official information and assistance:

City of Colorado Springs Planning Department

• Phone: (719) 385-5905
• Email: shorttermrentals@coloradosprings.gov
• General Planning Email: planningdev@coloradosprings.gov
• Website: coloradosprings.gov/str

Code Enforcement (for violations or complaints)

• Contact through Neighborhood Services Division
• Online reporting available through city website

Fire Department (safety inspections)

• Division of the Fire Marshal: (719) 385-5978
• New Construction: (719) 385-7352
• Fire Systems: (719) 385-7361

Sales Tax Information

• City Administration Building: 30 S. Nevada Ave, Ste 203
• Office hours: 8:00 AM – 5:00 PM, Monday through Friday
• Phone: Available through main city number

Colorado Department of Revenue (state taxes)

• Website: tax.colorado.gov
• Phone: (303) 238-7378

Future Outlook for Colorado Springs STR Regulations

Based on current trends and market dynamics:

• Continued Balanced Approach: The city appears committed to maintaining its two-tier system that accommodates both owner-occupied and non-owner occupied rentals
• Enhanced Digital Services: The electronic application and review system continues to be refined for better user experience
• Potential Fee Adjustments: Annual permit fees may see modest increases to cover administrative costs
• Stricter Enforcement: Enhanced monitoring capabilities and complaint systems may lead to more rigorous compliance oversight
• Military Market Growth: Continued expansion of military installations may drive sustained demand for quality STR accommodations
• Infrastructure Investment: City investments in tourism infrastructure and outdoor recreation may boost STR demand

The overall outlook remains positive for STR investors in Colorado Springs, with the city maintaining its business-friendly approach while ensuring neighborhood compatibility.

Ready to Invest in Colorado Springs Short-Term Rentals?

Colorado Springs offers exceptional potential for STR investors who understand its unique regulatory landscape and market dynamics. The city’s balanced approach to regulation, combined with year-round tourism appeal and strong military presence, creates a stable foundation for vacation rental investment success.

The two-tier permit system provides flexibility for different investment strategies, while reasonable fees and clear processes make compliance manageable. With proper planning and attention to regulatory requirements, Colorado Springs continues to offer some of the most attractive STR investment opportunities in the Rocky Mountain region.

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Remember: Always consult with local legal and tax professionals before making investment decisions.