Short-term rentals in Las Cruces, explained properly.

Sec. 16-508(h) limits maximum overnight occupancy of a short-term rental unit to two people per bed plus an additional two people per unit. Children under the age of two are excluded when calculating occupancy.

Sec. 16-508(j) says a short-term rental may not be used for gatherings of more than 15 additional persons above the allowed number of renters, or more than twice the limit of the number of renters allowed, whichever is greater.

Sec. 16-507 defines adequate insurance as property and liability insurance covering damage or loss to the unit and its contents with a minimum of $500,000.00 liability coverage. It can be a homeowner's policy with a short-term rental rider, a dwelling policy with the right endorsements, or a landlord's policy, and a policy from a short-term rental marketing company may be acceptable if the limits are met. Under Sec. 16-508(e) proof of insurance is required at registration, when the scope or amount of coverage changes materially, and whenever the City asks.

Sec. 16-508(f) applies to any short-term rental unit. The operator may restrict the number of vehicles allowed at the rental. On-street parking must follow other parking regulations and give priority to adjacent residents when there is a conflict.

Sec. 16-508(g) requires the unit to meet all applicable building, fire and other municipal and state codes. Smoke detector installations and entrance and egress identification (a map on the wall or the back of the door at each egress) must be installed. Smoke detectors must be maintained and their batteries replaced at least once a year. One currently serviced fire extinguisher must be within ten feet of any kitchen or indoor cooking area. The Fire Chief or designee may inspect for compliance with fire codes on 24 hours' notice. A violation in the context of a short-term rental is an offense under Article XII.

Sec. 16-508(d) requires the business registration to be posted inside the unit where anyone renting or occupying it can see it.

Under Sec. 16-512 the operator gives the notice for informational purposes only, and the Community Development Department supplies the list of property owners within 500 feet. The application must give contact information for the operator, any other qualifying operator and any contractor, employee or agent who can respond to complaints during business hours and in an emergency. A registration is not issued without a qualifying person or company responsible for responding to complaints. Within ten days of mailing, the operator gives the department a copy of the notice and a list of the addresses notified. The operator must tell the department and the neighbors of changes within 30 days. Failure to comply means the registration is not issued until the requirements are met.

Sec. 16-508(i) points to Chapter 19 for the noise rules. We haven't reviewed Chapter 19, so the hours and limits are not shown here.

Sec. 16-509 lets the City cite an operator in municipal court or another court of competent jurisdiction. Fines are reserved to fund enforcement of the article. The City may also ask for a finding of continuing noncompliance, in which case the court sets terms and a deadline for the remedy. Sec. 16-509 enforcement began on July 1, 2026 (Sec. 16-510), so it is in force as of October 18, 2026. A final municipal court order can be appealed to the district court within 15 days.

Under Sec. 16-509(c), staff designated by the city manager may revoke the registration for all short-term rentals managed or owned by an operator, by written determination, for a first or later offense that creates or continues a significant risk of substantial harm to health or safety, or for a third or later offense showing a pattern of negligence or indifference. Revocation is mandatory for a fifth offense within a three-year period. A staff decision to revoke can be appealed to the district court within 15 days.

The Lodgers' Tax Act (NMSA 1978 sections 3-38-13 to 3-38-25) lets a municipality impose an occupancy tax on lodging within its limits, and a county on lodging outside city limits, by ordinance. The tax may not exceed 5% of the gross taxable rent, which is the rent paid for lodging not counting state gross receipts tax or local sales taxes. Taxable premises are a hotel, motel or other premises used for lodging that is not the guest's household or primary residence. The tax does not apply to a guest who has been a permanent resident of the premises for at least 30 consecutive days or who has a written agreement for at least 30 consecutive days (unless the premises are temporary lodging near the guest's job), or when the rent is less than $2 a day. The person furnishing the lodging collects the tax on behalf of the city or county as a trustee and must charge it separately from the rent. The rate and filing rules that apply in a given place are set by that city's or county's own ordinance.

The Taxation and Revenue Department says gross receipts tax is imposed on businesses and is commonly passed on to the customer, in which case it must be stated separately on the invoice. Gross receipts include money received from leasing or licensing property employed in New Mexico. The rate varies by location because it combines state, county and municipal rates; since July 1, 2025 rates change only in July except in special situations. Marketplace providers without a physical presence in New Mexico are also subject to the tax once they have at least $100,000 of taxable gross receipts in the previous calendar year. State law lets receipts from leasing real property be deducted from gross receipts, but says that receipts hotels, motels, rooming houses, guest ranches or similar facilities receive from lodgers, guests, roomers or occupants are not receipts from leasing real property for that deduction.

The Taxation and Revenue Department says anyone who engages in business in New Mexico must register with it, and that engaging in business means carrying on any activity with the purpose of direct or indirect benefit. After registering, the business receives a New Mexico Business Tax Identification Number, used to report and pay taxes such as gross receipts tax. A marketplace provider without a physical presence in the state is engaging in business once it has at least $100,000 of taxable gross receipts sourced to New Mexico in the previous calendar year.