To run a short-term rental in Denver legally, you need a Denver short-term rental license, and the property has to be your primary residence. A new license costs $150 total: a $50 application fee plus the $100 annual license fee. You also have to register separately for city taxes, carry $1 million in liability insurance, and display your license number on every listing. The rules are stricter than many hosts expect, so it pays to know what you’re agreeing to before you apply.
Who Qualifies for a License
Denver treats any rental of fewer than 30 consecutive days as a short-term rental, whether that’s your whole house while you travel, a spare bedroom, or a basement apartment booked for a weekend. Stays of 30 days or more fall under landlord-tenant law instead.
The property must be your primary residence, meaning you live there at least 183 days a year and the address matches your government records. Investment properties, second homes, and vacation condos you don’t actually live in are not eligible. Only individual people can hold a license: corporations and LLCs cannot. Denver also caps each person at one short-term rental license at a time, which rules out building a portfolio of licensed properties.
Documents You Need Before Applying
You need at least one official record showing the rental property is your primary address:
- Colorado driver’s license or state ID with the property address
- Voter registration listing the rental address
- Motor vehicle registration tied to the same address
- Most recent federal tax return showing the rental address
You also need a Denver Sales and Use Tax License in place before the city will finalize the short-term rental license. It’s a separate online registration covering your tax collection obligations, and skipping it will stall your application.
How to Apply and What It Costs
Applications go through the Denver Online Permitting and Licensing Center. You upload your residency documents, fill in the property and owner contact details, and pay the fees electronically. Fees total $150 for a new license: $50 to apply and $100 for the first year. The city reviews the application and notifies you by email of the decision.
Licenses last one year. Renewal costs $100, and letting it lapse means you can’t legally host guests until you renew or reapply. Treat the expiration date like any other business deadline.
Taxes You’ll Owe on Every Booking
Denver stacks several taxes on short-term rental income, and the combined rate reaches 14.75% on every booking.
The largest piece is the Lodger’s Tax at 10.75%, calculated on the full amount a guest must pay to book, cleaning fees included. You collect it at the time of sale, not at the time of the stay. The remaining portion of the 14.75% covers applicable sales taxes. Colorado adds its own 2.9% state sales tax on short-term lodging, plus regional district taxes depending on where you are, so register for the state and local accounts too.
On top of that, hosts owe the Occupational Privilege Tax. As a self-employed owner operating a business in Denver, you pay $4 per month in business OPT regardless of how much you earn. If you have employees, additional withholding rules apply.
When Platforms Collect the Tax for You
Airbnb, VRBO, and Vacations By Owner are licensed vendor platforms that collect and remit Denver’s Lodger’s Tax on your behalf. If all your bookings come through one of them, you can deduct those sales on your Lodger’s Tax return so you aren’t paying twice. Direct bookings and bookings through platforms that don’t collect the tax are your responsibility, and you remit the Lodger’s Tax yourself on those.
Insurance, Safety, and Day-to-Day Rules
You must carry liability insurance covering short-term rental activity with a minimum of $1,000,000 in aggregate coverage, and the policy must stay active the entire time your license is valid, not only when guests are present. Standard homeowner’s policies rarely cover commercial lodging, so most hosts need a separate policy or a rider.
Every listing and advertisement must display your valid license number. The city uses that number both for manual review and for automated software that scans platforms for unlicensed properties.
Working smoke detectors, carbon monoxide alarms, and fire extinguishers are required. Depending on the building, your application may trigger an in-person inspection covering fire sprinklers, alarm and detection systems, and exit requirements. Safety violations are among the fastest routes to license suspension.
Operationally, you set your own maximum guest count, but only one rental contract can be active at a time, so you can’t book multiple groups into different parts of the house at once. Commercial events like parties and weddings are prohibited. You must give guests a property brochure with contact information, house rules, and city service details, and you have to designate a local responsible party who can respond when you’re away.
Renting Out an ADU
Denver allows accessory dwelling units, including converted basements, backyard cottages, and garage apartments, to be used as short-term rentals, but only if you live in the main house. You cannot live in the ADU and rent out the primary dwelling. You can technically hold a license for both the ADU and a room in your main home, but you cannot rent both at the same time. The arrangement has to stay inside the home-sharing framework rather than becoming a two-unit operation on one lot.
HOA Rules Still Apply
A city license does not override your homeowners association. Under Colorado’s Common Interest Ownership Act (C.R.S. ยง 38-33.3-101 and following), HOAs can regulate, restrict, or outright prohibit short-term rentals through their covenants. Some Denver-area HOAs ban rentals of fewer than 30 days entirely, and those bans are generally enforceable even if you hold a valid Denver license. Read your governing documents before you apply. Silence in the CC&Rs is not permission; check with your board.
Fines, Revocation, and Appeals
Denver actively enforces its rules, using data-scraping software to find listings without valid license numbers and issuing citations that can carry significant fines. The Director of Excise and Licenses can fine, suspend, revoke, or refuse to renew a license for good cause, including failure to maintain the required insurance.
If your license is revoked, you have 14 days from the date the revocation notice was mailed to file a written appeal with the Excise and Licenses Department. The same 14-day window applies if you want to contest a fine: request a hearing in writing within 14 days of the violation notice. Follow the instructions in the notice you received. Missing the window generally means the penalty becomes final.
Providing false information on the application or repeatedly violating the municipal code can result in permanent loss of your license, and getting back into good standing afterward is difficult.
If You Sell or Move
Your license is non-transferable. A buyer cannot inherit it and has to qualify and apply on their own after closing. If you move, the license for your old home becomes invalid because you no longer meet the primary residence requirement. You would apply fresh at the new address, and because each person can hold only one license, there’s no overlap period where you can rent both properties.