Understanding Bernalillo County’s Short-Term Rental Reclassification

Bernalillo County has implemented a formal policy to classify certain short-term rental (STR) properties as nonresidential for property tax purposes. This change is based on how a property is used rather than its physical structure. What this means is that if the property is used as a short-term rental for more than 30 days per year, your property will more than likely be reassessed as nonresidential, and your property's taxes will go up! 

What is a Short-Term Rental?

Bernalillo County defines a short-term rental as a dwelling, or any portion of it, that is rented for fewer than 30 consecutive days. However, definitions may vary across different government agencies, including municipalities, counties, and the state. It’s important to review the specific regulations that apply in the city and county where your property is located.

How Classification is Determined

Under New Mexico law, all property must be classified as either residential or nonresidential. The Bernalillo County Assessor evaluates short-term rentals using a “predominant use” standard.

If a property is primarily used to generate income through short-term stays, it may be classified as nonresidential. If it is primarily used as a residence, it may remain residential.

In some cases, if a property contains both residential and rental components, each portion may be classified separately when feasible.

Factors Considered

The Assessor reviews multiple factors when determining classification, including:

  • Owner occupancy and personal use
  • Frequency and duration of rental activity
  • Whether the property is operated as a business
  • Use of booking platforms or professional management
  • Whether the property is primarily used for income generation
  • How you, as home homeowner, advertise your property may influence the outcome more than how you use it
    (i.e., if you advertise all year long, only to secure a short-term resident during the balloon fiesta, your use may be changed because of your intent).

Properties with consistent rental activity and limited personal use are more likely to be classified as nonresidential.

Reclassification Process

Properties identified as short-term rentals may be reclassified based on available data from sources such as local agencies or third-party platforms. Once identified, the property is presumed to be nonresidential unless the owner provides documentation demonstrating otherwise.

Property owners may be asked to complete a questionnaire detailing how the property is used, including occupancy, rental frequency, and licensing.

Countywide Impact

According to Bernalillo County, approximately 4,000 properties were initially identified as potential short-term rentals. After review, about 1,000 properties were reclassified as nonresidential, while approximately 3,000 remained unchanged.

Available Resources

Bernalillo County has made several resources available to property owners on the Assessor’s website to support understanding and compliance with the reclassification process. These include:

Appeals and Next Steps

Property owners retain the right to appeal their classification through the protest process after receiving their Notice of Value.

Questions regarding this policy or assistance with the questionnaire can be directed to the Office of the Assessor at (505) 222-3700.