Non Residential Property Tax Classification on Short Term Rentals

The Board of Directors recently met with Lincoln County Tax Assessor, Walter Hill, along with LeeRoy Zamora and Cassie Sponagel to discuss the reclassification of short term rentals to the non residential property tax classification. Here are the key points from the meeting:

  • Tax reclassification began in 2012 after a group of hotels filed a protest with the state, who then brought it to the assessor's attention that short-term rentals were being assessed incorrectly.

  • Currently properties are scrubbed from the internet that are on any booking or lodging websites.

  • The County is regularly receiving reports from the Village of Ruidoso on rental permits and information collected from the Host Compliance software.

  • Any property found to be on these websites or from the Village reports are changed to NR whether it is rented a few times a year or regularly.

  • If a property that had shown to be a short-term rental no longer shows on reports from the Village the assessor's office would change back to the Residential (R) classification, as well as properties that have sold, unless the property then again shows up on the information provided by the Village or scrubbed websites.

  • The protest period to change the classification of a property begins from 30 days after the first of April when notices of value are mailed to property owners.

  • The property owner may notify the assessor’s office in writing or by phone and complete a protest form.

  • The protest is either settled or goes to the Protest Board which is monitored and run by the state; the board is made up of real estate licensees and civilians. The process may last as long as six months and the results may be appealed to a higher level in District Court.

  • A property owner may notify the assessor’s office in writing, at any time, that the property is no longer being rented. If the notification comes in prior to the protest period; January 1st through April 30th of any year then the property will be classified as R for that year’s taxes. If the notification comes in after April 30th the property will be classified as R but will be considered NR for the year with the R going into effect the following year.

  • Tax reclassification will not affect rentals that are rented for 30 days or more as they are considered as long-term rentals.

  • A list of known short-term rentals classified as NR will not be put on the assessor's website. Though the information is public record the Village of Ruidoso agreed not to publish it but to make the list available upon request. The County, as well, would not publish the list.

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