In response to unprecedented property tax rises, Gov. Jared Polis and legislative leaders have announced a plan to cut them through a ballot measure.
Residential property in the Denver metro area experienced value increases up to 45% in the 2023 valuation year. County assessors started sending out property valuations this year, with Boulder County residential home values increasing by a median of 35%.
A proposal unveiled Monday would roughly halve the tax increases facing homeowners in 2024 and pay for it by reducing the tax refunds that Coloradans receive through TABOR.
Determining property taxes is a three step process in Colorado. First, the assessor determines the actual value of a property. Colorado property owners are only taxed on the “assessed” value of the property and that tax is based on the taxing districts the property resides in through mill levies — think school districts, fire districts and local government.
All nine counties in the Denver metro experienced double digit increases, according to a press release from the Metro Denver assessors. Reassessment is based on transactions and market conditions from Jan. 1, 2021 to June 30, 2022 — when home values peaked in Colorado.
The median sales price for a single family home in Boulder County was $940,000 in June 2022, compared to $842,500 this past February, according to the Colorado Association of Realtors.
For comparison, when property taxes were last assessed in 2021 using June 2020 data, the median single family sales price in Boulder County was $602,961 — 55.9% less than the median sales price for the current assessment.
“The latest property values recognize the desirability of the county and the strength of the real estate market during the appraisal period which ended June 30, 2022,” Boulder County Assessor Cynthia Braddock said. “We encourage property owners to double-check their property information and review comparable property sales via our website. If they find any errors or disagree with the values, they are encouraged to file an appeal by the June 8 deadline.”
Residents will not know how much their property taxes due in 2024 will be until the end of the year, when both the tax rate and assessment rate are set. The statewide measure unveiled Monday could go to voters in November and impact both tax and assessment rates.
According to a release from Polis’ office, the proposal combined with previous reductions already passed would cut the average homeowner’s tax increase in half and save owners more than $1,200 on average over the next two years. It would equal $900 million to $1.6 billion in property tax relief for homeowners and businesses.
“It is no secret that Colorado is a great place to live and work, and as our state grows, we must take action to ensure people can thrive in the community they love,” Polis said in the release. “This proposal will cut the average homeowners’ tax increase in half and deliver long-term relief to protect people, especially seniors on a fixed income, from being priced out of their homes.”
The measure would need to quickly pass through Colorado’s legislature, which adjourns at the end of this week, to make it onto voter’s ballots this November. It would then be up to voters whether to approve or reject.
As proposed, the plan would reduce the residential assessment rate from 7.15% to 6.7% in 2023 and 2024, continuing the reduction for primary residences through 2032. It would reduce the amount of value a home is taxed by $40,000 through 2032.
The assessment rate for commercial properties would be reduced from 29% to 27.85%, with further reductions possible after 2026. There would also be an expansion of the homestead exemption for seniors from $100,000 up to $140,000 and allowing them to continue receiving this reduction if they move.
As part of this, the state’s 2024 refund pool would be reduced by about a tenth. This would likely mean a smaller TABOR refund check with extra funds to be distributed to local governments and others to backfill the property tax revenue they might lose if this proposal passes.
