Summit County Colorado Real Estate Taxes for Nonresident & Foreign Owners (2026)

Posted by Natalia Bassova on June 18, 2026 08:53 pm under Summit county real estate

Here is a list of taxes that are applied for both – out-of-state US residents & foreign nationals who own Summit County Colorado real estate.

1. Colorado State Income Tax

Tax Rate: 4.40%

Colorado taxes nonresidents on Colorado-source income, including:

Rental income from Colorado property
Gain from the sale of Colorado property
Pass-through income from Colorado real estate partnerships, LLCs, and S corporations

Usually a nonresident must file a Colorado return if they have taxable Colorado-source income.

2. Colorado Nonresident Real Estate Withholding

Withholding Rate: 2.00%

When a nonresident sells Colorado real estate for $100,000 or more, the closing agent generally must withhold:

2% of the sales price, OR
the seller’s net proceeds,

whichever is less.

This is not an additional tax. It is a prepayment of Colorado income tax and may be partially refunded when the seller files a Colorado tax return.

3. Colorado Property Tax

Typical Effective Rate: approximately 0.45%–0.60% of market value statewide

Property tax varies by county, municipality, school district, and special district.

For residential property, Colorado currently uses assessment rates of approximately:

6.25% for local government purposes
7.05% for school finance purposes

Actual property tax bills vary significantly by location. Property taxes apply equally to residents and nonresidents.

4. Colorado State Sales Tax on Short-Term Rentals

State Rate: 2.90%

Short-term rental income is usually subject to Colorado sales tax.

Local taxes often apply on top of that.

Typical combined state and local rates range from 7% to 12%+. They are more in some resort areas.

5. Local Lodging / Accommodation Taxes in Colorado

Typical Rate: 2%–15%+

Many Colorado resort communities impose additional taxes on short-term rentals.

Examples may include:

Lodging taxes
Accommodation taxes
Marketing district taxes
Tourism improvement district taxes

The exact percentage depends on the property’s location.

Additional Federal Taxes for Foreign Owners in USA

The following taxes generally apply only to foreign owners (nonresident aliens).

6. Federal Withholding on Rental Income (FDAP)

Default Withholding Rate: 30%

Foreign owners are usually required to pay a 30% withholding on gross rental income unless the owners elect to treat the income as Effectively Connected Income (ECI).

In the case of an ECI election, foreign owners’ rental income is taxed on net profit after deductions, not gross rents.

Example

If annual gross rent is $100,000, default withholding will be $30,000 (30%)

7. Federal Income Tax on Net Rental Income (ECI Election)

Rate: U.S. federal individual income tax brackets

Current federal rates range from:

after allowable deductions.

Many foreign investors elect ECI treatment because it is usually more favorable than the 30% gross withholding.

8. FIRPTA Withholding

(Foreign Investment in Real Property Tax Act)

Standard Withholding Rate: 15%

When a foreign owner sells U.S. real estate, the buyer generally must withhold 15% of the gross sales price.

This withholding is a prepayment of tax and may be partially refunded after filing a U.S. tax return.

Example

If sale price is $2,000,000, FIRPTA withholding will be $300,000.

9. Federal Capital Gains Tax

Foreign owners are generally taxed on gains from U.S. real estate sales.

Current federal long-term capital gain rates are:

depending on income level.

Because of FIRPTA rules, foreign owners generally cannot avoid U.S. taxation on gains from U.S. real estate sales.

10. Federal Estate Tax

Maximum Rate: 40%

Foreign owners who are not domiciled in the United States receive only:

$60,000 exemption for U.S.-situated assets

compared with the much larger exemption available to U.S. citizens and residents.

Example

If Colorado property value is $2,000,000, potential estate tax will be hundreds of thousands of dollars depending on structure and treaty relief.

11. Federal Gift Tax

Maximum Rate: 40%

Foreign owners may be subject to U.S. gift tax on gifts of Colorado real estate.

Current annual exclusion:

$19,000 per recipient (2026)

Higher exclusions may apply in certain circumstances.

Taxes Colorado Does NOT Impose

Colorado currently has:

No Colorado estate tax
No Colorado inheritance tax
No Colorado gift tax

Quick Reference Table for Colorado Taxes

Tax	Current Rate	Out-of-State U.S. Owner	Foreign Owner
Colorado income tax	4.40%	+	+
Colorado nonresident withholding	2.00%	+	+
Colorado property tax	~0.45%-0.60% effective	+	+
Colorado sales tax on STRs	2.90% state + local	+	+
Local lodging taxes	2%-15%+	+	+
Federal rental withholding (FDAP)	30%	No	+
Federal income tax on net rental income	10%-37%	Possible	+
FIRPTA withholding on sale	15%	No	+
Federal capital gains tax	0%-20%	+	+
Federal estate tax	Up to 40%	No special nonresident rule	+
Federal gift tax	Up to 40%	No special nonresident rule	+

Most Important Taxes for Foreign Investors

For a foreign investor purchasing a rental property in Breckenridge, Keystone, Frisco, Dillon, or Silverthorne, the four taxes that usually have the greatest financial impact are:

Colorado income tax (4.40%)
Federal rental income tax (30% withholding unless ECI election is made)
FIRPTA withholding (15% upon sale)
Federal estate tax (up to 40% with only a $60,000 exemption)

Important note: Property tax is not a single statewide percentage. The actual amount depends on the county, school district, special districts, and the property’s assessed value. The percentages shown above are practical statewide estimates and assessment metrics, not a single statutory tax rate.

Disclosure: Please note that this information is provided for general informational purposes only. It does not constitute professional advice. You are strongly encouraged to verify all information with qualified and certified industry professionals before making any decisions or taking any actions.

Last Updated: June 18, 2026

Reviewed for general accuracy by real estate broker Natalia Bassova.

Tax laws may change. Always consult a CPA, tax attorney, or licensed tax professional.