A New Way to Tackle Empty Homes in Colorado

Colorado lawmakers recently heard a proposal that would allow local governments to tax vacant houses—a move dubbed the “ghost tax.” The idea is designed to compel owners of empty homes to pay extra money, with the proceeds earmarked for affordable housing. Although the House Finance Committee voted against it, the conversation is far from over.

The Proposal

• First of its kind in America: The bill would grant counties and small towns the authority to define what constitutes a vacant home, set tax rates, and decide how revenue is allocated.
• Existing powers: Some municipalities already have the legal framework to impose such taxes, but none have exercised it yet.

Arguments For

• Dual benefit: Reduces the number of unused homes and generates funds for low‑income workers, teachers, nurses, and police officers.
• High vacancy in tourist hubs: Popular vacation spots like Aspen and Vail suffer from high vacancy rates that hurt local economies.

Arguments Against

• Impact on second‑home owners: Critics fear the tax could penalize those who own properties for family or retirement use.
• Enforcement concerns: Opponents argue the tax would be difficult to enforce and could infringe on property rights.
• Alternative solutions: Realtors and builders suggest lowering construction costs and speeding up approvals rather than taxing empty homes.

International and State Examples

• Vancouver: A similar tax lowered vacancy rates and raised nearly $200 million for housing.
• California: Courts have been divided, with one city successfully defending its tax in a legal battle.

Denver’s Different Approach

• In Denver, where vacant apartments outnumber vacant houses, activists are exploring a tax targeting vacant rental units. The city’s home‑rule status may allow them to pass such a law without state approval.

Outlook

While the bill was rejected, lawmakers and community leaders agree that a fair method of taxing empty homes could benefit many Colorado towns. The debate remains active, and future proposals may evolve into new forms.