Bernalillo County Officials Clash Over New Short-Term Rental Property Tax Policy

A new policy enacted by the Bernalillo County Assessor’s Office in late April 2026 to reclassify short-term rental properties from residential to commercial for tax purposes has ignited a public feud between county officials and drawn condemnation from property owners now facing significantly higher tax liabilities. The policy, implemented by County Assessor Damian Lara, unilaterally changes the tax status of properties used for rentals on platforms like Airbnb and Vrbo. This reclassification subjects them to a higher commercial tax rate, a move Lara stated was intended to provide “guidance” to property owners on what to expect. The change, however, was made without new legislation from the state and is based on the assessor's interpretation of existing law. This interpretation was immediately and forcefully challenged by Bernalillo County Treasurer Tim Eichenberg, whose office issued a statement on April 24, 2026, calling the assessor’s new policy “unlawful, premature and erroneous.” The core of the treasurer’s objection is that the authority to define and classify property types for taxation rests with the New Mexico state legislature, not with a single county official. According to the Treasurer’s Office, the term “short-term rental” is not defined anywhere in the New Mexico Property Tax Code. Eichenberg argued that the assessor does not have the legal authority to create a widespread meaning for an undefined term and apply it as policy. The statement emphasized that any change of this magnitude should be the result of “uniform, consistent legislation to be included in the Property Tax Code and implemented statewide.” “A fair tax system is built on consistency, not aggressive local interpretation,” Treasurer Eichenberg stated. “Homeowners in Bernalillo County should not face different treatment simply because one office chooses to move ahead on a contested reading of the law.” He further contended that statutes are meant to reflect the will of the people, not to be “stretched or distorted to suit the agenda of any single official or office.” For the small business owners and individuals who operate these rentals, the financial implications are substantial. The shift from a residential to a commercial tax rate can translate into thousands of dollars in additional annual property taxes, directly impacting the profitability and viability of their operations. The policy has prompted an outcry from local property owners who feel they are being unfairly targeted by a sudden and legally questionable administrative change, creating significant financial uncertainty for their businesses. The dispute has also taken on a political dimension. Linda Stover, the Deputy County Treasurer and a candidate for Bernalillo County Assessor, has publicly sided with the treasurer. In an opinion piece published in the Albuquerque Journal, Stover, who previously served as County Clerk and worked in the mortgage and real estate industries, argued that public officials should exercise restraint when the law is unsettled. “When the law is unsettled, public officials should be careful. They should not rush ahead of the Legislature. They should not create confusion for taxpayers,” Stover wrote. She asserted that her professional background was based on adhering to specific statewide statutory guidelines that ensure uniformity, a principle she believes the current assessor has violated. Stover has made the issue a cornerstone of her campaign, stating that short-term rental properties should remain classified as residential unless and until the state legislature explicitly directs otherwise. This kind of abrupt, localized policy shift based on administrative interpretation rather than clear legislation creates significant operational and financial risk for small business owners. In our experience, navigating the patchwork of municipal and county tax regulations is one of the biggest challenges for property-based businesses. While local governments often seek to level the tax playing field between short-term rentals and traditional hotels, unilateral actions like this one in Bernalillo County cause instability and can lead to costly disputes. Business owners who have built financial models based on one set of tax rules are suddenly faced with drastically altered liabilities, threatening their cash flow and long-term planning. For businesses operating in multiple jurisdictions, keeping up with such unpredictable changes becomes a major compliance burden. This is precisely the type of situation where professional guidance on tax preparation and compliance is critical. C&S Finance Group LLC helps clients manage these complex regulatory challenges, and business owners can learn more at csfinancegroup.com. The conflict in Bernalillo County highlights a growing national trend of municipalities grappling with how to regulate and tax the burgeoning short-term rental market. The immediate future will likely involve legal challenges from affected property owners and increased pressure on the New Mexico legislature to provide a clear, statewide statutory definition for these properties. The outcome of the upcoming county assessor election will also be a key factor in determining the long-term viability of this controversial policy.