New Mexico Short-Term Rental Regulation: A Guide For Airbnb Hosts

What are Short-Term Rental (Airbnb, VRBO) Regulations in New Mexico?

To legally operate a short-term rental in New Mexico, hosts must navigate a complex web of state and local regulations. While there are no statewide laws specifically governing short-term rentals, individual cities and counties have enacted their own ordinances.

At the state level, short-term rental operators in New Mexico are required to collect and remit lodgers' tax, which is typically 5% of the rental fee. Additionally, hosts must pay gross receipts tax, ranging from 5.125% to 8.6875% of the listing price including cleaning fees.

To start a short-term rental business in New Mexico, hosts generally need to:

• Obtain necessary permits and licenses from their local jurisdiction
• Register for a Combined Reporting System (CRS) number with the New Mexico Taxation and Revenue Department
• Ensure their property meets local zoning, safety, and building code requirements
• Acquire appropriate insurance coverage
• Comply with any local restrictions on number of rentals, occupancy limits, parking, etc.

When considering starting a short-term rental business in New Mexico, it's crucial to thoroughly research local regulations and factor compliance costs into your business plan. As regulations can change frequently, staying informed and adaptable is key to long-term success in this market.

Short-Term Rental Licensing Requirements in New Mexico

While New Mexico does not have statewide short-term rental regulations, individual cities and counties have established their own licensing requirements. Here's a comprehensive overview of the licensing process in some major New Mexico jurisdictions:

Albuquerque

To operate a short-term rental in Albuquerque, hosts must:

1. Obtain a business registration from the City of Albuquerque
2. Acquire a Combined Reporting System (CRS) number from the New Mexico Taxation & Revenue Department
3. Apply for a Short-Term Rental permit through the city's online portal
4. Submit required documents, including:
   A detailed floor plan
   Proof of STR insurance
   A signed "Good Neighbor Agreement"
5. Pay the $120 initial application fee ($90 for annual renewals)

The permit is usually approved within 5-7 business days after submitting a complete application. Failure to obtain a permit may result in fines and penalties, though specific amounts are not listed on the city's website.

Santa Fe

Santa Fe has more stringent requirements for short-term rental operators:

1. Verify property eligibility (Santa Fe limits residential STR permits to 1,000 citywide)
2. Prepare required documentation:
   Proof of ownership
   Floor plan
   Proof of insurance
   New Mexico CRS/GRT number
3. Apply online through the City's Customer Self-Service portal
4. Pay the $100 non-refundable application processing fee
5. Pass property inspections (fire safety, building codes)
6. Pay the $325 annual fee for the STR permit and business license
7. Notify neighbors within 200 feet of the property

The entire process, including inspections, can take several weeks. Operating without a permit can result in fines of up to $500 per day and potential legal action.

Taos

Taos requires short-term rental operators to:

1. Obtain a Short-Term Rental Permit (limited to 120 permits citywide)
2. Apply online during the designated application period (opens April 1 annually)
3. Ensure the property is in an eligible zoning district
4. Provide a rental packet with safety information and local contact details
5. Install required safety equipment (smoke detectors, carbon monoxide detectors, fire extinguishers)
6. Pay the permit fee (amount not specified on the website)

Permits in Taos expire on September 30th each year, with a renewal period until November 30th. The city does not specify fines for non-compliance on their website, but operating without a permit is likely to result in penalties.

Roswell

Roswell's short-term rental licensing process includes:

1. Obtaining a New Mexico Tax ID number
2. Completing the Short-Term Rental Permit and License Registration form
3. Paying a $35 fee to the Business License Clerk
4. Submitting an insurance certificate and off-street parking plan
5. Passing inspections by city building and fire inspectors

The timeline for approval depends on inspection scheduling and completion of any required safety improvements. Operating without addressing safety issues identified during inspections can result in the cessation of business operations.

In all jurisdictions, it's crucial to comply with local regulations to avoid fines, penalties, and potential legal issues. Short-term rental hosts should regularly check with their local authorities for any updates or changes to licensing requirements, as these can evolve over time.

Required Documents for New Mexico Short-Term Rentals

To operate a short-term rental in New Mexico, hosts must obtain and submit several key documents to ensure compliance with state and local regulations. The specific requirements may vary by jurisdiction, but generally include the following:

Short-Term Rental Permit Application

• Purpose: Allows the local government to review and approve the short-term rental operation
• Obtain from: City or county planning/zoning department (e.g., Santa Fe's Land Use Department)

Proof of Property Ownership

• Purpose: Verifies the applicant's legal right to use the property as a short-term rental
• Acceptable documents: Warranty deed, property tax bill, or other official record

Site Plan and Floor Plan

• Purpose: Shows the property layout, parking spaces, and room configuration to ensure compliance with zoning and occupancy rules
• Requirements: Drawn to scale, labeling all rooms and parking spaces

Proof of Insurance

• Purpose: Demonstrates the host has appropriate liability coverage for short-term rental use
• Obtain from: Insurance provider, specifying short-term rental or landlord coverage

New Mexico Business Tax ID (CRS) Number

1. Purpose: Allows reporting and payment of gross receipts taxes to the state
2. Obtain from: New Mexico Taxation & Revenue Department

City/County Business Registration

1. Purpose: Registers the short-term rental as a business with the local jurisdiction
2. Obtain from: City or county business licensing office (e.g., Albuquerque's Treasury Division)

Signed "Good Neighbor Agreement" (some jurisdictions)

1. Purpose: Commits the host to following noise, parking, occupancy, and other local rules
2. Obtain template from: Local short-term rental office or website

24/7 Local Contact Designation Form

1. Purpose: Provides a local point of contact to quickly address any issues that arise
2. Information needed: Name, phone number, email of contact person who can respond within one hour

Hosts should consult their specific city and county short-term rental offices for additional details on required documents and submission processes. Failing to obtain and submit all mandatory documents can result in significant fines and penalties.

New Mexico Short-Term Rental Taxes

Short-term rental operators in New Mexico are subject to several state and local taxes. Understanding these tax obligations is crucial for hosts to remain compliant and avoid penalties. Here's a breakdown of the key taxes that apply to short-term rentals in New Mexico:

Gross Receipts Tax (GRT)

The Gross Receipts Tax is a statewide tax on businesses for the privilege of doing business in New Mexico. It applies to all revenue generated from short-term rentals, including rental fees, cleaning fees, and any other charges.

The GRT rate varies by location, ranging from 5.125% to 8.6875% as of 2024. The rate is determined by combining the state rate of 5.125% with the applicable county and municipal rates. Hosts must register with the New Mexico Taxation and Revenue Department, obtain a CRS number, and file periodic GRT returns.

Lodgers' Tax

In addition to the GRT, many cities and counties in New Mexico impose a Lodgers' Tax on short-term rentals. This tax is paid by guests but collected and remitted by hosts. Rates vary by jurisdiction but typically range from 5% to 7% of the total rental amount, including cleaning fees.

Some examples of Lodgers' Tax rates in popular New Mexico destinations:

• Albuquerque: 5% Lodgers' Tax + 1% Hospitality Fee
• Santa Fe: 7% Lodgers' Tax (5% occupancy tax + 2% convention center fee)
• Taos: 5% Lodgers' Tax
• Las Cruces: 5% Lodgers' Tax

Hosts must register with their local tax authority and file regular Lodgers' Tax returns, even if they had no rental activity during the filing period.

Occupancy Tax Exemptions

Certain guests, such as federal government employees on official business, may be exempt from paying occupancy taxes in New Mexico. Hosts should obtain the proper documentation for any exempt stays and maintain accurate records.

Tax Collection by Booking Platforms

Some short-term rental platforms, like Airbnb and Vrbo, collect and remit the Gross Receipts Tax and applicable Lodgers' Taxes on behalf of their hosts in many New Mexico jurisdictions. However, hosts are still responsible for registering with tax authorities and filing all required returns, even if they had no bookings outside of these platforms.

Deductions and Write-Offs

Short-term rental operators in New Mexico may be able to deduct certain expenses to reduce their taxable income. Some common deductible expenses include:

• Mortgage interest and property taxes
• Rental unit supplies, linens, toiletries, etc.
• Cleaning and maintenance costs
• Utility bills
• Short-term rental insurance
• Platform host service fees
• Depreciation of furniture and appliances used in the rental
• Marketing and advertising expenses
• Professional services (legal, accounting, etc.)
• Home office expenses (if applicable)

Hosts should consult with a tax professional to ensure they are claiming all eligible deductions and maintaining proper documentation.

Navigating the complex web of state and local taxes can be challenging for short-term rental hosts in New Mexico. By understanding their tax obligations, registering with the appropriate authorities, and staying informed about any changes to regulations, hosts can minimize their risk and maximize the profitability of their rental business.

Does New Mexico Strictly Enforce STR Rules?

Based on discussions in online forums like Reddit and BiggerPockets, it appears that enforcement of short-term rental regulations varies significantly across different cities and counties in New Mexico. While the state has some universal requirements like the Lodgers' Tax, the strictness of STR oversight largely depends on local ordinances and enforcement priorities.

Santa Fe stands out as one of the least Airbnb-friendly cities in New Mexico, with stringent regulations and active enforcement. The city caps residential STR permits at 1,000, requires a 50-foot buffer between rentals, and charges high annual fees. Hosts on Reddit report that Santa Fe's rules are "no joke" and the city "is cracking down on unpermitted STRs." Fines for violations can reach $500 per day, indicating Santa Fe's commitment to upholding its strict STR ordinance.

In contrast, Albuquerque in Bernalillo County appears to take a more lenient approach. While the city requires STR permits, occupancy limits, and "good neighbor" agreements, many hosts seem to operate without full compliance. Redditors have expressed frustration with the proliferation of unlicensed STRs in Albuquerque neighborhoods, noting that enforcement is limited and fines are only around $300 per infraction. Compared to Santa Fe, Albuquerque is relatively Airbnb-friendly due to inconsistent rule enforcement.

Other communities fall somewhere in between. Taos requires STR permits but caps the total number at 120. Roswell mandates a permit, business license, and property inspections, but the enforcement level is unclear from online discussions.

Overall, New Mexico presents a patchwork of STR regulations that can be challenging for hosts to navigate. While the state is not universally hostile to Airbnb, certain cities like Santa Fe have adopted strict rules and enforcement to curb the growth of short-term rentals. However, in places like Albuquerque, a sizable number of hosts appear to operate STRs with minimal compliance, enabled by lax enforcement of existing regulations.

Prospective New Mexico Airbnb hosts should carefully research the specific requirements in their target market, as the regulatory landscape varies considerably by jurisdiction. While some areas are clearly cracking down on rule-breakers, others seem to take a more hands-off approach that emboldens hosts to skirt STR ordinances. Ultimately, the wisest (and lowest risk) course of action is to follow all applicable permitting rules and tax requirements from the outset, even if local enforcement is spotty or inconsistent.

How to Start a Short-Term Rental Business in New Mexico

Starting a short-term rental business in New Mexico involves several key steps to ensure compliance with state and local regulations. Here's a comprehensive guide to getting your STR operation up and running:

Research local regulations: Thoroughly investigate the specific short-term rental rules in your city and county, as they can vary significantly across the state. Understand zoning restrictions, permit requirements, occupancy limits, parking rules, and any other applicable regulations. Consult with local officials and legal professionals if needed.

Tip: Don't assume that the absence of STR-specific regulations means you can operate without oversight. Many jurisdictions apply general business and zoning rules to vacation rentals.

Register your business: Obtain a business license from your city or county and register your short-term rental with the appropriate local authorities. In some areas like Albuquerque, you'll need a specific STR permit in addition to a general business license.

Tip: Start the permitting process early, as it can take several weeks or months to secure all necessary approvals. Factor permit and license fees into your startup costs.

Obtain a state tax ID: Register with the New Mexico Taxation and Revenue Department to obtain a Combined Reporting System (CRS) number. This is required for reporting and paying state lodgers' tax and gross receipts tax on your rental income.

Tip: You can apply for a CRS number online through the New Mexico Taxpayer Access Point (TAP) website.

Prepare your property: Ensure your rental unit is safe, clean, and well-maintained. Install required safety equipment like smoke detectors, carbon monoxide detectors, and fire extinguishers. Provide a rental packet with important information for guests, including emergency contacts and local rules.

Tip: Invest in high-quality furnishings, linens, and amenities to make your rental stand out and attract positive reviews. Consider hiring a professional photographer to showcase your property in its best light.

Secure appropriate insurance: Purchase liability and property damage insurance that specifically covers short-term rental use. Review your existing homeowners' or landlord policy to understand any exclusions or limitations related to STRs.

Tip: Shop around for the best coverage and rates, and consider working with an insurance broker who specializes in vacation rental properties.

Create your listing: Choose a platform like Airbnb or Vrbo to list your rental property. Craft a compelling description, upload high-quality photos, and set competitive rates based on market research. Be transparent about your rental's amenities, rules, and any quirks or limitations.

Tip: Use dynamic pricing tools to automatically adjust your rates based on demand, seasonality, and local events. Offer special deals or discounts to attract bookings during slower periods.

Manage your bookings: Establish a system for handling inquiries, reservations, check-ins, and check-outs. Communicate clearly with guests about house rules, arrival instructions, and any special considerations. Be responsive to questions and concerns throughout the stay.

Tip: Consider using a vacation rental management software or hiring a professional property manager to streamline operations and provide 24/7 guest support.

Comply with tax requirements: Collect and remit all applicable taxes, including state lodgers' tax (5%), gross receipts tax (varies by location), and any local lodgers' or occupancy taxes. File regular tax returns and maintain accurate records of your rental income and expenses.

Tip: Work with a tax professional who understands the short-term rental industry to ensure full compliance and maximize your deductions.

By following these steps and staying informed about evolving regulations, you can build a successful and compliant short-term rental business in New Mexico. Remember to prioritize guest satisfaction, maintain open communication with neighbors and local authorities, and adapt to changes in the market and regulatory landscape over time.

Who to Contact in New Mexico about Short-Term Rental Regulations and Zoning?

When navigating short-term rental regulations in New Mexico, it's crucial to contact the appropriate local authorities for the most accurate and up-to-date information. Here are some key contacts for major cities and resources for STR hosts in New Mexico:

Albuquerque and Bernalillo County:

• Albuquerque Planning Department: (505) 924-3860
• Website: https://www.cabq.gov/planning/

Santa Fe:

1. Short-Term Rental Office: (505) 955-4663 or (505) 955-6336
2. Website: https://santafenm.gov/land-use/short-term-rentals/

Taos:

1. Planning, Community and Economic Development Department: (575) 751-2016
2. Website: https://www.taosgov.com/259/Planning-and-Zoning

Roswell:

1. City of Roswell Finance Department: (575) 624-6700
2. Website: https://www.roswell-nm.gov/1391/Short-Term-Rentals

For state-level tax inquiries:

1. New Mexico Taxation and Revenue Department: (505) 827-0700
2. Website: https://www.tax.newmexico.gov/

Communities and Resources for New Mexico STR Hosts:

New Mexico Short Term Rental Association (NMSTRA)

1. Website: https://newmexicostra.org/
2. This organization provides updates on regulations, hosts events, and offers resources for STR operators in New Mexico.

Airbnb New Mexico Community Center

1. Website: https://community.withairbnb.com/t5/New-Mexico/ct-p/NewMexico
2. An online forum where Airbnb hosts in New Mexico can connect, share experiences, and discuss local regulations.

BiggerPockets New Mexico Real Estate Investment Forum

1. Website: https://www.biggerpockets.com/forums/731-new-mexico-real-estate-investing
2. While not specific to STRs, this forum can be a valuable resource for discussing real estate investment strategies, including short-term rentals, in New Mexico.

Remember that regulations can change, so it's always best to verify information directly with local authorities. These contacts and communities can provide valuable insights and support as you navigate the short-term rental landscape in New Mexico.

What Do Airbnb Hosts in New Mexico on Reddit and Bigger Pockets Think about Local Regulations?

Discussions on Reddit and BiggerPockets reveal a range of opinions among Airbnb hosts in New Mexico regarding short-term rental regulations. Here are some notable examples:

Reddit - "Strict short term rental rules in my city. Help!"

1. In this thread, a Santa Fe host expresses frustration with the city's strict STR rules, including permit fees, occupancy limits, and the one rental per week restriction. They consider fighting the rules by speaking at a city council meeting.
2. One commenter notes that while the rules are strict, they are still manageable. They share their experience operating an Airbnb in Santa Fe for 8 months under the current regulations.
3. Others point out that the city's affordable housing shortage has made STRs a contentious issue. Recent city council members were elected on platforms to tighten STR rules, so fighting the ordinance may be an uphill battle.
4. The general consensus is that the rules, while restrictive, are not unusual for cities grappling with housing affordability and neighborhood preservation concerns.

BiggerPockets Forum - "New Mexico Politicians may tax STR properties as commercial"

1. A post warns about discussions among some New Mexico county assessors to reclassify short-term rentals as commercial properties, removing residential property tax caps. This could significantly increase taxes for STR owners, especially in larger counties like Bernalillo.
2. While no legislation has been introduced yet, the mere possibility has some hosts concerned about the future profitability and viability of their rental businesses.

Overall, the experiences shared by New Mexico hosts on these forums paint a picture of a regulatory landscape that varies significantly by city. While some communities like Santa Fe have strict rules and active enforcement, others like Albuquerque appear more lenient, though that may change as STRs continue to proliferate.

The uneven playing field and potential for rule changes seem to be top of mind for many hosts. Those who have found ways to operate successfully within the current regulations often advise others to stay informed, adaptable, and above all, compliant with local requirements to minimize risk. Engaging with local host communities and advocating for fair, consistent policies through official channels are also recommended strategies.

Disclaimer: While we here at BNBCalc strive to keep all of our regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each area and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.