Executive Summary
- Natural-Person Mandate: Corporate entities, LLCs, and trusts are strictly prohibited from holding STR licenses.
- 1-License-Per-Individual Cap: Operators are limited to a single license, firmly establishing a primary residence baseline across the metro area.
- Attrition Enforcement: Grandfathered corporate licenses face a hard sunset upon deed transfer or expiration.
Key Regulatory Provisions
Operator Eligibility
The new regional alignment mandates that only natural persons who use the property as their primary residence are eligible for an STR license. LLCs, investment groups, and out-of-state entities are entirely excluded.
Deed Transferability
Licenses are strictly non-transferable. Upon the sale of a property, the existing license is immediately voided. The new owner must establish the property as their primary residence before applying for a new license.
Unbundled Tax Stack
- State Sales Tax: 2.9%
- Municipal Lodging Tax: 10.75% (Denver) / Variable by municipality (e.g., Arvada at 2%)
- RTD/Special District: 1.1%
- Combined Impact: Up to ~14.75% depending on the specific metro jurisdiction.
Enforcement & Penalties
The metro municipalities are pooling resources for automated platform scraping. Violators face revocation of their license for 12 months and fines of up to $999 per day of illegal operation.
Investor Due Diligence Takeaway
The Denver Metro area is now entirely hostile to institutional and out-of-state STR investment. Buyers must pivot to 30+ day medium-term rentals (MTRs) to remain compliant while preserving yield.
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