Santa Fe, NM Airbnb & Short-Term Rental Regulations 2026

Regulation Overview

New Mexico's best-known short-term-rental market, drawing arts, culture and outdoor tourism; the city hard-capped residential STR permits in 2020, so most investor interest now centers on acquiring an existing permit rather than obtaining a new one.

The city caps residential STR permits at 1,000 citywide with one permit per person, and permits do not transfer on sale — a hard numeric cap on new supply.

New Mexico State Law

State preemption: No state preemption. Senate Bill 1162, which would have barred local STR bans and reclassified STRs as residential for zoning/building-code purposes, was defeated on the Senate floor, leaving New Mexico cities and counties with full local control over STR permitting, caps and zoning.

Statewide rules: New Mexico has no statewide STR license. The state's Lodgers' Tax Act (as amended in 2019) requires local lodgers' taxes to be collected on short-term rentals of any size, closing a prior exemption for small bed-and-breakfasts. Operators must also register for the statewide Gross Receipts Tax (GRT), which applies to STR income generally.

Taxes: Statewide Gross Receipts Tax (GRT) applies to STR income (rate varies by location, generally in the high-single-digit percent range). Local Lodgers' Taxes, set independently by each city/county, are layered on top and typically run 5%-7%.

2025–2026 legislation: No new statewide STR bill was confirmed as enacted for 2025/2026. Regulatory change in this region has come from local ordinances — Santa Fe's 2020 permit cap, Taos County's August 2024 county-wide cap, the Town of Taos's separate cap, and Ruidoso's newly rewritten June 2026 ordinance are the most significant recent developments.

Santa Fe Rules

Governing jurisdiction: City of Santa Fe (Growth Management/Land Use); Santa Fe County has separate, differing rules outside city limits..

• Santa Fe caps residential short-term rental permits at 1,000 citywide, with a strict limit of one permit per person, under Ordinance No. 2020-35 (effective January 1, 2021).
• STR permits do not transfer on sale — buying a property with an existing STR does not guarantee the buyer inherits the seller's permit.
• Because the permit cap constrains new supply, much of the investor activity in this market involves buying a property that already comes with a valid, transferable-in-practice STR business (even though the permit itself doesn't legally transfer) or waiting for cap availability.
• Permit issuance requires neighbor notification and a mandatory fire inspection.
• Santa Fe County separately capped non-owner-occupied STRs outside city limits in 2024, creating a second, distinct regulatory regime just beyond the city boundary.
• Some secondary sources report a limit of roughly 44 reservations per year for residential-zone permits, though this figure was not independently confirmed from a primary source.

Not confirmed

We could not verify the following against a primary source. Confirm each with the jurisdiction before you rely on it:

• Exact current permit fee amount.
• Whether the ~44 reservations/year limit is accurate and current.
• Whether owner-occupancy is required for any permit tier.
• Occupancy limits and minimum-stay rules.
• Santa Fe County's specific (separate) cap number and rules for unincorporated areas.

Buyer Due Diligence Checklist

Before you write an offer on a short-term rental here:

• Get a written determination from the governing jurisdiction for the specific parcel. Verbal guidance from anyone else is not diligence.
• Establish which jurisdiction governs — city, town, village and unincorporated county can differ sharply within a few miles.
• Ask whether an existing permit transfers on sale. In many markets it does not, and a listing marketed as a running short-term rental may convey nothing of the sort.
• Read the HOA or condo covenants during your inspection period. Private covenants bind even where the jurisdiction permits the use.
• Model revenue against the legal occupancy cap, not the bedroom count.

Frequently Asked Questions