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Colorado Property Owners Brace for Higher Taxes

by Joe Monzon, Denver, August 2015

 

Property values have largely recovered from the real estate recession throughout Colorado. Increased 2015 real estate values for assessment will lead to higher tax bills for many property owners. However, actual tax levies won't be set until appeals wrap up and local tax jurisdictions figure out their budgets, which will be in mid-to-late December of this year.


Robust Market


Increasing values reflect the region's robust real estate market. That's a big change from the past two assessment cycles, when values dropped in many areas. Many counties are now reporting double-digit increases (See table below).

 

2015 and 2016 real estate assessments are based on an appraisal date of June 30, 2014. Market sales, income, and replacement cost data, were gathered from all of 2013 and the first half of 2014. Values were mailed May 1, 2015, and will become the basis for 2015 property tax bills, to be mailed in January 2016. The same valuations will be used for 2016 taxes, payable in 2017.

 

Commercial Owners Pay More


The Gallagher Amendment to the Colorado Constitution requires that commercial property owners shoulder a larger share of the overall tax burden than residential owners, approximately 55% for commercial and 45% for residential.

 

The assessment ratio for Colorado commercial properties is 29%, and the residential ratio is 7.96%.

 
 

Property Values Rebound

 
 

County

Residential Increase

Commercial Increase

 
 

Denver

29.6%

18%

 
 

Arapahoe

22%

15%

 
 

Adams

19.8%

11.6%

 

 

Tax Bills TBD


Assessors say understanding what the value increases will mean for actual taxes is a complex calculation but many owners should budget for a bigger bill.

 

Denver offers an interesting case. Amendment 2A, which voters approved in 2012, allows the city to keep tax revenues above the limits set by the state's Taxpayer Bill of Rights. The measure also caps the annual increase in what the city collects from property taxes at 6%. However, Denver's general fund claims only about a quarter of all property taxes. What happens with Denver Public Schools, which get about a 60% share, will carry more weight.