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Colorado - Higher Property Taxes Forecasted

by Joe Monzon, Denver, February 2015


Colorado's assessed property values took a significant jump the past two years, according to a recent report. Higher values and higher taxes are a trend that's expected to continue.


Maintaining the 45/55 Split


Colorado's Gallagher Amendment caps the share of property taxes falling on residential property owners at 45%. Commercial and other property types shoulder the remaining 55%.


Every two years, the Division of Property Taxation makes a report to the State Board of Equalization and the General Assembly. The residential property assessment rate study is done to maintain the 45/55 split.


The Findings


Based on statewide assessed values between June 30, 2012 and June 30, 2014, the report calculated a 14.3% jump in residential property values, a 9.4% increase for commercial property values, an 11.1% hike for farmland, and a 5.55% increase for industrial property.


Oil and gas, which accounts for about one-tenth of the overall assessed property tax base, actually dropped 4% during this two-year period. Oil prices have taken an even bigger tumble, falling by more than half since June.


The residential assessment ratio is currently set at 7.96% of assigned assessor actual value, while all other property classifications are assessed at 29% of actual value. The differing rates of appreciation shown above could translate into a decision on the part of the Colorado Legislature to reduce the residential assessment ratio during the 2015 legislative session, to maintain the 45/55 split mandated by Gallagher.


While the numbers in the report will not have an effect on 2014 property tax bills, they do suggest higher property values and taxes for in 2015 and 2016 across all property classifications.