Bill to raise taxes on vacation and second homes moves forward
A bill that would increase the property tax cap for housing that’s not a primary residence, such as vacation rentals and second homes, passed its first New Mexico House committee today.
Rep. Jason Harper, R-Sandoval, told the House Consumer and Public Affairs Committee that House Bill 71 would keep the existing cap on property tax increases at 3% for any primary residence, whether owner-occupied or a long-term rental. Annual tax increase caps on short-term rentals and second homes would go up to 10%.
But Linda Gallegos from the New Mexico County Assessor’s Affiliate said many of the 33 county assessors are concerned about the logistics of having multiple tax rates.
During the public comment period Gallegos said, “How would we be sure that this legislation affects just the primary residence versus the second homes?”
Her comments pointed to a confusion about whose tax rates would change – there would not be a tax rate change for primary residences.
Opposition was vocal, coming from the Apartment Association of New Mexico, the New Mexico
Realtor's Associations and the New Mexico Business Coalition, among others.
Rep. Andrea Romero, D-Santa Fe, said she hoped HB71 would incentivize long-term rentals over short-term or vacation rentals.
A 2020 UNM report showed almost 5,000 vacant homes in Santa Fe County that are for “seasonal or occasional use,” while the Santa Fe Association of Realtors says the county has a shortage of 7,300 rental units. The Census found 42% of homes in Taos County are vacant. Both cities have a serious shortage of rental units.
The bill now goes to the Taxation and Revenue Committee.
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