Understanding Colorado Property Tax Assessments for 2023: What Homeowners Need to Know

As a homeowner in Colorado, it's essential to stay up to date with property tax assessments to understand your financial obligations and plan your budget accordingly. Property taxes are a primary source of revenue for local governments, and they help fund essential services such as schools, public safety, and infrastructure development. In this blog post, we will explore how Colorado property tax assessments have been assessed for 2023 and what it means for homeowners.

Assessment Methodology:

Property tax assessments in Colorado are based on the market value of the property, which is determined by the county assessor's office. Assessments are conducted every two years, and the most recent assessment was conducted in 2021, which will impact the 2023 property tax bills. The market value is calculated by analyzing comparable sales in the area and other factors such as property characteristics, location, and condition.

Impact on Homeowners:

The recent property tax assessments in Colorado have shown an overall increase in property values, resulting in an increase in property taxes for many homeowners. However, the degree of increase will vary depending on several factors, including location, property type, and individual market conditions.

For example, homeowners in urban areas such as Denver, Boulder, and Colorado Springs can expect to see a more significant increase in their property taxes due to strong demand and low inventory, resulting in higher market values. Conversely, homeowners in rural areas may experience less of an increase in property taxes due to lower market values and limited demand.

Property tax rates also play a significant role in the total tax obligation for homeowners. In Colorado, property tax rates are set by local governments and can vary widely depending on the jurisdiction. Property tax rates are typically expressed as a percentage of the property value, and they can fluctuate depending on the government's budget needs.

How are property taxes determined and calculated?
Property Taxes Due = Actual Value x Assessment Rate x Mill Levy

Actual Value: 

The appraisers in the assessor’s office determine actual (market) values using appraisal standards and methods. For residential property, we analyzed sales that occurred in the 24-month period prior to June 30, 2022. We adjust these sales for changing market conditions over time (appreciation/depreciation) to a level of value as of the effective appraisal date of June 30, 2022 - as if all the sales in the 24-month collection period all sold on the same day (appraisal date).

We then use these time-adjusted sale prices as an indication of value for similar properties while making market adjustments for property conditions, characteristics, location, along with other property attributes affecting value. For non-residential property, the cost, market, and income approaches to value are all considered. Agricultural classified land is valued based on a rolling 10-yr average of a formula of established earning capacity of the land subject to typical farming/ranching practices, less expenses. These values are completely divorced from any real estate market forces, trends, or value influences.

Assessment Rate:

Residential Property is assessed at 6.765% of actual value; this is a new, lower rate for 2023; the previous Res-rate was 6.95%, and in 2021 it was 7.15%. Non-Residential Property for the first time in 40 years has a new assessment rate; the previously fixed non-res rate of 29% of actual value has been lowered this year to 27.9%. These changing assessment rates are the result of the 2020 voter-approved repeal of the 1982 Gallagher provision of Amendment 1 to the Colorado Constitution. A residential lot that is vacant is still considered non-residential property and is assessed at the higher non-res rate. For 2023 only, Colorado Legislators passed Senate Bill 22-238 that is granting a $15,000 credit (actual value) to residential property, and a $30,000 (actual value) credit to Commercial improvements. This credit is not reflected on your Notice of Valuation, the NOV is reporting the full Actual value of your property before any credits applied. These credits will be reflected on the actual tax bill.

Mill Levies:

A taxing entity’s tax rate is measured by mills; this mill rate is set each year by each individual taxing authority such as school district, county govt., town, fire, water and sanitation, library, and other special districts. These entities provide tax-supported services and are listed on your actual tax bills. They can also be viewed on the Assessor or Treasurer’s websites for each property. A property’s tax is calculated as follows:

Actual value x Assessment rate x Mill Levy
(e.g., $600,000 Res Condo & 45.67 total mills.)
Formula: $600,000 x 6.765% x 45.67 mills = Tax Due.
On a calculator: $600,000 x .06765 x .04567 = $1,853.75

What Homeowners Can Do:

Homeowners in Colorado can take several steps to manage their property tax obligations, including:

Review Your Property Tax Assessment: It's essential to review your property tax assessment and make sure that it accurately reflects the property's market value. If you believe that your assessment is too high, you can file an appeal with the county assessor's office.

Plan Your Budget: Understand how property tax assessments will impact your overall financial obligations and plan your budget accordingly. Homeowners can take advantage of property tax exemptions, such as the senior citizen exemption, to reduce their tax liability.

Monitor Market Conditions: Stay informed about market trends and conditions in your area to anticipate future property tax assessments and potential changes to tax rates. This information can help you plan for the long-term and make informed decisions about your property.

Can I appeal my property taxes to the Assessor?
No, you cannot appeal taxes to the Assessor. You can only appeal your property’s ACTUAL VALUE or CLASSIFICATION to the Assessor, which is a determining factor in how your taxes are calculated, but you cannot appeal the actual taxes due on a property - at least not to the Assessor’s Office. Questions concerning taxes and their

distribution should be directed to the Taxing Authority that levied the taxes. This should be done during their budget preparation meetings, which are open to the public and usually take place in November of each year. The office of the county commissioners or the assessor’s office can provide contact info for each taxing entity to find out when budget meetings take place.

Colorado property tax assessments have been assessed for 2023, and many homeowners can expect an increase in their property taxes. However, individual tax obligations will vary depending on several factors, including location, property type, and market conditions. Homeowners can take several steps to manage their property tax obligations, including reviewing their property tax assessment, planning their budget, and monitoring market conditions. By staying informed and proactive, homeowners can navigate the property tax landscape and plan for a secure financial future.