New Mexico Lawmakers Weigh Standardized Property Taxes for Short-Term Rentals

Ongoing Debate Over Short-Term Rental Tax Policy in New Mexico

On a frosty morning in Albuquerque’s downtown, with the Sandia peaks in the distance, the realities of managing short-term rentals in the Southwest become more than just a number on a spreadsheet. For homeowners and real estate investors navigating the ever-shifting property landscape here, statewide decisions can ripple out to affect not just balance sheets, but daily life in neighborhoods across New Mexico.

A recent legislative report has highlighted a growing concern for the owners of nearly 14,000 short-term rentals (STRs) across New Mexico. It turns out that how these properties are taxed depends largely on which county they’re in, and it’s causing confusion, frustration, and sometimes unexpected financial burdens for property owners.

Disagreement Among New Mexico’s Counties

According to a freshly published study released this week, New Mexico’s 33 county tax assessors each have their own method for classifying short-term rental properties. This patchwork approach has resulted in what the report calls “assessment confusion,” with homeowners left unclear about their tax responsibilities. The document urges state lawmakers to step in and create consistency for everyone involved.

This study was prepared in response to House Memorial 52, which two Republican legislators introduced earlier in the year. A working group of realtors, state officials, and other stakeholders was brought together to better understand the economic impact of short-term rentals and the effect of local regulations.

Platforms like Airbnb and Vrbo have reshaped the landscape for owners, generating over $1 billion in economic activity for New Mexico in 2023 alone. Yet not everyone sees this shift as purely positive. Critics, pointing to a persistent housing shortage—sometimes estimated at upwards of 90,000 units—argue that short-term rentals take up homes that might otherwise be available to long-term residents. (see source)

What the Data Shows About Short-Term Rentals

The newly released 19-page report was presented for the first time at a recent committee meeting. Among its key findings: a mere 15% of New Mexico’s short-term rentals are available for year-round booking. The overwhelming majority—about 85%—are either used by owners for part of the year or involve homeowners renting out only part of their dwelling (like one or two rooms), leaving the rest of the property as their primary residence. For tax purposes, these are not pure commercial operations, and that distinction is at the heart of current debates.

Carl Vidal, who leads Irvie Homes—a prominent owner of dozens of short-term rentals in cities like Albuquerque, Santa Fe, Placitas, Corrales, and even as far as Austin, Texas—backs the idea of treating most STRs as residential, not commercial. He points out that this year alone, over 1,000 STR owners saw their tax classification change from residential to “non-residential,” bringing along higher tax bills and new regulatory fees.

“A few assessors across the state took completely different positions depending on the county,” Vidal told legislators, explaining how inconsistent policies have left owners scrambling. “This lack of uniformity happened because the legislation and the Legislature never provided direction.”

Pushback From Local Assessors

Yet even as the working group labored to find solutions, not all voices at the table were in agreement. County assessors involved in the process said the report leaned too far in favor of short-term rental owners. They expressed concerns that their perspective and the broader community’s needs weren’t fully represented in the study’s recommendations. According to their notes, the group didn’t come close to a “well-balanced consensus.”

Isaiah Romero, Santa Fe County Assessor, echoed these worries during the committee hearing. He stressed the importance of involving not just assessors but also city officials, treasurers, and local managers who are directly responsible for overseeing short-term rentals within their jurisdictions. Nonetheless, Romero made it clear that if lawmakers pass new rules at the state level, assessors will follow them.

Legislative Perspectives: A Split View

New Mexico’s lawmakers are currently wrestling with what—if any—state-level rules should be put in place. State Sen. Antonio “Moe” Maestas and Rep. Marian Matthews, both Democrats from Albuquerque, find themselves on opposite sides of the question. Their debate highlights the complexity this issue presents for local property owners and communities alike.

Sen. Maestas, who has experience as a rental property owner (but didn’t disclose this at the hearing), argues that tight zoning rules, not the rise of STRs, are to blame for the housing crunch. He believes these rentals typically don’t generate more demand for public services and shouldn’t be subject to heightened tax rates.

“If someone’s able to maintain their old home and buy a new home and turn it into an AirBnB, more power to them. They shouldn’t be blamed for the lack of housing.”

On the other hand, Rep. Matthews believes STRs change the fabric of local neighborhoods. She hears frequently from residents in her district’s Northeast Heights area who say long-term local housing is harder to find as more houses convert to vacation rentals.

“We’ve taken residential property that has been historically residential property, we’re renting it to people for short-term vacations and so forth. And the question is, ‘Should that be taxed the same as my home, which I live in all the time… as opposed to taxed as a business property?’ To me, it seems like a business, and it is going to take more resources.”

What’s Next for Property Owners and Lawmakers?

With the legislative session looming just weeks away, no delegate has yet volunteered to carry a bill on STR tax classifications. Still, Rep. Matthews urged her colleagues to start considering the implications and hinted that the question won’t remain unanswered much longer. In her words, “I would like us to think about whether or not we should pick a dog in this fight… Because it does have an impact.”

For New Mexico property owners, especially those juggling short-term rentals as part of their financial plans, the evolving landscape around property taxes and county regulations is more than just a policy discussion—it’s something that may directly impact their returns, flexibility, and peace of mind. And for those invested in communities on both sides of the issue, keeping a close watch on legislative developments in 2026 will be important as state leaders move toward a clearer answer.