How to Start a Short-Term Rental in Albuquerque: Permit, Good Neighbor Agreement and Insurance

If you plan to rent a home, apartment, or room in Albuquerque for stays shorter than 29 consecutive days, you need a City of Albuquerque short-term rental permit before you advertise or accept a booking. This guide walks through the process in a practical order: confirm what counts as a unit, set up the business, get the state tax number, pass the zoning and Business License review, meet the insurance and Good Neighbor Agreement requirements, and keep up with reporting.

This article is informational content, not legal or tax advice. City and state rules change, and the agencies named here are the final authority. If you own several units, hold property in a trust, or rent under a lease, talk to a New Mexico attorney and a CPA before you spend money.

Materials and information you need before you start

• Proof of ownership, or a written lease that expressly allows short-term rental. A landlord's written consent is essential.
• Your legal name, or the name of your LLC or corporation, plus a New Mexico address for the registered agent if you form an entity.
• A floor plan drawn to scale that shows bedrooms, bathrooms, kitchens, fire safety equipment, exits, and total square footage.
• A Business Tax Identification Number (BTIN) from the New Mexico Taxation and Revenue Department (TRD). It is free.
• An insurance certificate showing short-term rental coverage of at least $250,000 per unit.
• The Good Neighbor Agreement, which you print and post inside the unit.
• A payment method for the state filing fee (only if you form an LLC), the city permit fee, and the city Business License fee.
• Any HOA, condo, or covenant rules for the property. These can prohibit rentals even when the city allows them.

Step 1: Confirm your rental fits the city definition

The city permit applies to stays of fewer than 29 consecutive days. Count nights carefully, including extensions, because a stay that crosses the 29-day line falls outside the short-term rental rules. Keep a booking calendar so you can prove your count if the city asks.

Count units by kitchens. A unit is one or more rooms with a kitchen. Each unit needs its own permit and its own Business License. A basement suite with its own kitchen is a separate unit. Rooms that share a kitchen belong to the same unit. Confirm how your layout counts before you apply, because the answer determines how many permits you pay for.

Set your maximum overnight occupancy next. The city formula is 2 people over age 12 per bedroom, plus 2. A three-bedroom unit therefore allows 8 overnight occupants (2 times 3, plus 2). Children age 12 and under are not counted in that formula, but confirm with the city how they are treated before you list the property.

Gatherings are capped at twice the overnight occupancy and at 20 people, and guests must disperse by 10 pm. For the three-bedroom example, twice 8 is 16. Read the rule as applying the lower of the two figures, and confirm that reading with the city before you write it into your house rules.

Step 2: Decide how you will hold the business

The entity that runs the rental is the permit applicant. You have two practical paths.

Operate as a sole proprietor. New Mexico has no statewide DBA or assumed-name registration. If you list under a brand name, there is no state filing for that name. You still need the city permit and Business License, and you still need the BTIN.

Form an LLC. File Articles of Organization through the SOS Enterprise Business Filing System at https://enterprise.sos.nm.gov/. The filing fee is $50. An LLC files no annual or biennial report with the Secretary of State. Keep these points in mind:

• The name must include the words limited liability company, limited company, or the abbreviation L.L.C., LLC, L.C., or LC. It must be distinguishable from existing New Mexico entities and from any reserved name. Search the registry at https://enterprise.sos.nm.gov/search first.
• If the LLC will trade under a different name, such as a listing brand, state that name in the Articles of Organization. There is no separate DBA filing to fall back on.
• A name reservation costs $20 and holds the name for 120 days. It cannot be renewed.
• Expedited handling costs $150 for same business day service when received before 2:00 p.m., or $100 for two business day service. Expedited fees are paid separately and are nonrefundable. If the request arrives after 2:00 p.m., the same-day service moves to the next business day.
• Every LLC must maintain a registered office in New Mexico and a registered agent who meets the state's residency or place-of-business rules. Changing the agent later costs $20 for an LLC.

Corporations are a different case. They file a biennial report at $25 and owe a $50 annual franchise tax, and an LLC taxed by default as a pass-through does not owe that franchise tax. Most small rental operators do not need a corporation. Ask a CPA before choosing a tax election.

Step 3: Get your free BTIN from TRD

Register with the Taxation and Revenue Department at https://www.tax.newmexico.gov/. Check the registration rules at https://www.tax.newmexico.gov/businesses/who-must-register-a-business/. The BTIN is free. It was formerly called the CRS number.

The BTIN is a tax registration, not a license. New Mexico issues no general statewide business license. Its own business navigator lists the BTIN as one of three universal steps, with the Secretary of State filing and any activity-specific licenses from the Regulation and Licensing Department as the others.

New Mexico has no sales tax. It has a gross receipts tax, which is charged to the seller. Combined state and local rates run from 5.25% to 9.4375% under the schedule effective July 1, 2026 through June 30, 2027. Rental income is generally reported through the gross receipts tax, but confirm with TRD how your lodging receipts should be reported before you file your first return.

Step 4: Clear zoning and obtain the City Business License

The City Business License needs an active BTIN and a zoning review. Do this before you buy furniture or sign a lease. Confirm three things:

• Your zone allows short-term rental use at the address.
• Your HOA, condo, or covenant documents do not prohibit it.
• Your lease, if you rent the unit, allows it in writing.

The annual City Business License fee is $36.75 as of July 1, 2026. Confirm the current fee with the City of Albuquerque before you budget for it. One permit and one Business License are required for each unit.

Step 5: Draw the floor plan the city will review

The application requires a floor plan that shows bedrooms, bathrooms, kitchens, fire safety equipment, exits, and square footage. A plan drawn to scale on graph paper or in a free drawing tool saves a correction round.

Label every room with its name and dimensions. Mark each exit and each piece of fire safety equipment on the plan, and write the total square footage on the drawing. Check that the plan matches the unit as it will be rented. If you later finish a room or change a kitchen, update the plan and check whether the unit count changed.

Step 6: Buy insurance of at least $250,000 per unit

The city requires short-term rental insurance of at least $250,000 per unit. If a booking platform provides coverage, that platform cover must meet the same amount, so read its terms rather than assuming it does.

Standard homeowner or renter policies often exclude paid stays by guests. Ask your agent in writing whether your policy covers paid short-term guests on the property. Many insurers offer a short-term rental endorsement or a separate policy. Get a certificate of insurance and keep a copy with your permit file. The premium varies by property and carrier, so collect quotes before you set your nightly rate.

Step 7: Post the Good Neighbor Agreement

The Good Neighbor Agreement must be posted in the unit. Use the current version from the city, and confirm with the city that you have the right version before you print it. Do not write your own substitute.

Post the agreement where guests will see it, such as beside the entry or on the refrigerator. Repeat the key rules in your listing and your welcome message. Quiet hours, parking, trash collection, the occupancy limit, and the 10 pm gathering deadline are the rules guests most often break, so make them easy to find.

Step 8: Submit the permit application and pay $120

Assemble the full packet before you submit it. The packet includes the active Business License, the floor plan, your acknowledgment of city ordinances, the posted Good Neighbor Agreement, and your insurance certificate. The first-year permit fee is $120.

City approval usually takes 5 to 7 business days once the application is complete. An incomplete application delays the clock, so a missing insurance certificate can cost you a week or more. Do not advertise or accept bookings until you have the approved permit.

Step 9: Register for lodgers' tax and hospitality fees, then report monthly

Lodgers' tax and hospitality fees apply to short-term stays. Rates and registration steps change, so ask the city and TRD how to register and which rates apply to your unit before your first booking.

A monthly report is due by the 25th. This applies even when Airbnb or VRBO collects and remits tax for you. The platform's remittance does not replace your own filing, so keep your own booking records and compare them with the platform's payout reports each month.

Step 10: Renew each year and keep the paperwork current

The city permit renewal costs $90 per year. Calendar the renewal date, and keep the Business License and BTIN active. Also calendar your insurance renewal and your Articles of Organization status if you formed an LLC. A lapse in any one of these can stop your bookings even if the permit itself is current.

Costs at a glance

Item	Amount	Agency or source	Notes
Articles of Organization (LLC only)	$50	NM Secretary of State	No annual or biennial report
Name reservation (optional)	$20	NM Secretary of State	Holds name 120 days, not renewable
Expedited filing (optional)	$150 same business day, or $100 for two business days	NM Secretary of State	Paid separately, nonrefundable
BTIN	Free	NM Taxation and Revenue Department	Tax registration, not a license
City short-term rental permit, first year	$120	City of Albuquerque	Per unit
Permit renewal	$90 per year	City of Albuquerque	Per unit
City Business License	$36.75 a year as of July 1, 2026; confirm with the city	City of Albuquerque	Per unit, requires BTIN and zoning review
Lodgers' tax and hospitality fees	Confirm with the city and TRD	City and TRD	Monthly report due by the 25th
Insurance	Varies by carrier	Your insurer	At least $250,000 per unit

Common mistakes to avoid

• Advertising before approval. The permit is required before you advertise or rent for stays under 29 consecutive days.
• Counting bedrooms instead of kitchens. The unit count follows kitchens, and each unit needs its own permit and Business License.
• Assuming homeowner insurance covers paid stays. Get written confirmation from your insurer.
• Looking for a statewide license. New Mexico has none for general business. Your local approvals are the city permit and Business License.
• Treating the platform's remittance as the whole job. Your monthly report is still due by the 25th.
• Skipping the HOA check. A covenant can block rentals even after the city approves your permit.
• Using a trade name without stating it. An LLC that trades under another name must state that name in its Articles of Organization.
• Using the wrong entity name ending. An LLC name must include limited liability company, limited company, or an accepted abbreviation.

What to expect after you open

Owners who finish the permit, insurance, and reporting steps before the first booking usually avoid the delays that come from enforcement letters, platform removals, or a rushed application. Results vary widely by property, neighborhood, season, and how you manage guests, so treat any income estimate with caution. Many owners find that clear house rules and a fast response to guest complaints reduce the problems neighbors raise with the city. Your results may differ.

Get help and confirm the current rules

If your numbers or layout are unusual, the New Mexico Small Business Development Center offers free business advising at https://www.nmsbdc.org/. The U.S. Small Business Administration's New Mexico district page is at https://www.sba.gov/district/new-mexico. Check the City of Albuquerque's short-term rental FAQ before you file, because city figures change. For the entity, tax, and insurance decisions, a New Mexico attorney and a CPA can review your specific property.

This article is informational content, not legal or tax advice. Verify every fee, deadline, and requirement with the agency that administers it before you rely on it.