Many homeowners in Colorado were surprised when they received their property tax valuation notices this spring. Denver County saw an average increase of 33%, while Douglas County experienced a 47% increase. The median increase in the state was 40%. These property valuations are reassessed every two years using sales data. The 2023 valuations will be based on comparative property sales between July 1, 2020, and June 30, 2022. Although the increase in property values may be alarming, it is worth noting that the average sale price of a home in the Denver metro area has also increased by 41% during the same period. While valuations are the most important piece, much more goes into determining how much you owe in property taxes.
Property Tax Calculations
In Colorado, property taxes are calculated by multiplying the value of the property by the assessment rate, which is currently 6.765% for residential properties and 29% for most non-residential properties (pending legislation would reduce residential rates to 6.7%). The resulting taxable value is then multiplied by the total mill levy rate, which is determined by dividing the total amount of money needed to fund local government operations by the total assessed value of taxable properties. Certain ownership exemptions, such as those for seniors, may be applied to reduce the taxable value.
Over the past few years, property values in Colorado have increased significantly, and many homes have been undervalued. Consider that the last time property tax valuations were released was May of 2021, just after the pandemic’s peak. The assessor’s office usually includes a list of comparable property sales in the mailed-out valuations. If you didn’t receive this data, contact your county to get a copy. If you live in Denver County, you can look up your property valuation and get other information in Denver Property Taxation and Assessment System. Each of Colorado’s counties has a similar site to help property owners.
Colorado Tax in Contrast
It’s worth noting that Colorado has some of the lowest property taxes in the country, and the funds collected go towards vital infrastructure like schools and streets. If you want to appeal your property tax valuation because of errors or missing information, you have until June 1st to do so, and we can help you prepare. However, it is important to consider the possible outcomes before making an appeal, as assessors may lower, raise, or maintain your property valuation. This is particularly important to keep in mind if you’ve made improvements to your home that the country may not be familiar with. We only recommend appealing your home value if you have strong comps to prove that the valuation is incorrect.
We are proud to serve our communities as experts in the real estate field, so do not hesitate to reach out with questions or concerns!