It is more important than ever to control expenses. One of the largest expenses faced by property owners in a year is property taxes. This expense usually appears on operating statements under the heading “Fixed Expenses,” but property owners should understand taxes are not fixed. This page presents frequently asked questions (FAQs) about property tax laws in Colorado (they vary from state to state) and examines ways of appealing property taxes as well as some of the potential pitfalls. Most of the questions are focused on real estate taxes, but many of the same guidelines apply to business personal property.
How is my property determined?
The Assessor must consider a variety of market-based information in appraising different kinds of property. These include cost and depreciation data (the cost approach), sales of similar properties (the market approach), and earning capacity (the income approach). All three approaches are used to value vacant land and commercial property. The assessor is limited to using the market approach and gross rent multipliers when valuing residential property – condominiums, houses, and apartments.
When is my property assessed?
Real estate is re-appraised every two years in the odd-numbered year. (Personal property is revalued each year). The Assessor’s office is restricted to considering data from the 18-month period ending on June 30 of the year before the reappraisal. New 2023 values will be based on data from the period between January 1, 2021, and June 30, 2022.
The Assessor must consider the property condition as of January 1 of the revaluation year, but the date of value is June 30 of the prior year. The assessment generally remains stable for two years unless there are changes in the property during the year.
What is the difference between "actual" value and "assessed" Value?
The Assessor determines the “Total Actual Value” (market value) of real property. A percentage is applied in order to derive the “assessed” value.
Commercial property in Colorado is assessed at 29% and residential at 6.765%. Due to this difference taxes on a $1,000,000 commercial property will be more than 4 times as much as taxes on a $1,000,000 home.
The assessed value is multiplied by the mill levy to determine the annual tax bill.
Who sets the mill levy?
Mill levies are based on the budgets of each taxing authority such as school, county, city, fire, water and sanitation, and recreation districts. These districts provide services to you.
When am I notified of the new value?
Notices of Value are mailed on May 1 each year. The notice states “This Is Not A Tax Bill”, however, the tax bill you receive in January is based on the value established by the Assessor.
What is the procedure for protesting my valuation?
Instructions for appealing your property’s valuation are printed on the Notice of Valuation. Appeals must be filed no later than June 8. You can appeal in person at the Assessor’s office or by mail.
Outside the metro area, county assessors must respond by July 1. Most metro area counties delay their response until September. If you wish to appeal further, you should file a protest with the County Board of Equalization (BOE). Further appeals can be filed with the Colorado State Board of Assessment Appeals (BAA), the district court, or County arbitration boards.
Does the TABOR (Taxpayer Bill of Rights) Amendment of 1992 prevent my taxes from rising?
Not directly. The TABOR Amendment controls the amount that the State and local governments can collect and spend. It does not limit tax increases on individual properties. Many municipalities and districts have asked voters to remove TABOR limits from their mill levies, reducing the limits placed on them.
Should I hire a tax agent?
You may be able to lower your property taxes by appealing your assessment. While you can appeal on your own, it’s often a good idea to hire a qualified property tax consultant to help you.
A good consultant will be familiar with the intricacies of valuation and property tax laws. They can help you gather the necessary evidence to support your appeal and present your case to the assessor’s office.
Here are some tips for hiring a property tax consultant:
- Get referrals from friends or colleagues.
- Check the consultant’s credentials and experience.
- Make sure the consultant is familiar with the laws in your area.
- Get a written contract that explains their fees.
Remember, property taxes are one of the largest expenses associated with owning a property. By appealing your assessment, you can save yourself a significant amount of money.