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The biggest inequity in the Colorado property tax system is that only 7.15% of the market (“actual”) value of residential property is taxable, while 29% of all other property (including commercial and industrial property) is taxable. This inequity is mandated by a formula approved by the Colorado voters and placed into the Colorado Constitution. That formula can only be changed by a vote of the Colorado citizenry. Despite this constitutional inequity, the actual appraisal methods used by Colorado assessors to establish property values are one of the most accurate and fair systems in use by any state. Residential property taxpayers in Colorado pay one of the lowest effective tax rates per dollar of market value of anyplace in the United States—generally ranking from 46th to 50th lowest in the U.S.
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Generally, no. Tax year 2019 was a general re-appraisal year in Colorado. All taxable properties were re-valued in Delta County in Tax Year 2019. Tax Year 2020 is an “intervening” year in Colorado’s statutory 2-year reappraisal cycle. Generally, a property value will only change in Tax Year 2020 if the physical characteristics of the property have changed, or if the property’s use or classification for assessment purposes has changed. In those cases, the Assessor’s office will send a Notice of Valuation in May, 2020 that will reflect the valuation change. Otherwise, the insert you receive in your Tax Year 2019 Tax Notice (mailed in January, 2020) serves as your Tax Year 2020 Notice of Valuation, with the actual value of your property stated on the Tax Notice itself. Using this method to notify taxpayers of their valuation in an intervening year saves several thousand dollars in mailing costs. The taxpayer has a right to challenge the Tax Year 2020 valuation until June 1, 2020, if he or she believes the valuation of his or her property is incorrect. Under Colorado law, properties will be reappraised to a new level of value for Tax Year 2021.
What will affect property valuations in Delta County is how the real estate market has behaved here during the 18 months prior to June 30, 2018. First, under Colorado law, the sales data collection period for 2019 and 2020 tax years ended on June 30, 2018 (Colorado requires re-appraisal of all taxable real property to a new level of value every two years—2019 was a “general re-appraisal year”; 2020 is an “intervening” year.) Second, both sales volume have increased and sales prices are generally increasing in Delta County during the data collection period, however, sales price changes have not been universal or even across the county. Colorado law requires that the Assessor’s appraisal models be representative of the real estate market based on actual arms-length sales that have occurred. The data collection period for valuations for tax years 2019 and 2020 starts January 1, 2017, and ends June 30, 2018 - what the 2019 valuations will look like will depend on how the Delta County real estate market behaves during the 18 months that began on January 1, 2017. Please note that these dates are not determined by the assessor, but are set by Colorado statute. Colorado law (and two published Colorado Court Cases) prohibits the Assessor from considering any sales that occurred after June 30, 2018 for purposes of tax year 2019 and 2020 valuations.
Foreclosures that have occurred after June 30, 2018 will, under Colorado law, have no effect on Tax Year 2019 and 2020 valuations because they occurred after the end of the sales data collection period for this re-appraisal cycle. For foreclosures that occurred during the data collection period that ended June 30, 2018, the following rules apply: Under Colorado Constitutional, statutory, and/or regulatory provisions, conveyances of property to a financial institution in a foreclosure process (including Deeds in Lieu of Foreclosure) cannot be considered for valuation analysis and modeling purposes because they are deemed to be non-arms-length transactions. Conveyances of property from a financial institution to a buyer are to be considered and may be used for analysis and valuation modeling purposes if the Assessor determines that they are valid arms-length transactions.
All taxes may be perceived as “unfair” by some individuals or groups. Each type of tax (sales, income, or property) has advantages and disadvantages—for either the taxpayer or for the government agencies that rely on tax revenue to provide services. One of the features of the property tax that makes it attractive for those reliant on tax revenues is that the property tax is a relatively stable source of revenue, regardless of short-term fluctuations in the economy. Many of the government entities that rely on property tax provide services that also are necessary regardless of economic conditions. Examples of these are schools, county government (road maintenance, law enforcement, etc.), cities and towns (law enforcement, water, sewage treatment, etc.), water districts, cemetery districts, hospital and ambulance districts, and fire protection districts. Thus, the property tax provides a relatively stable source of revenue to agencies whose services continue to be in demand regardless of economic conditions The property tax is also one of the most cost-efficient taxes to administer and collect—and those collections and distributions are administered locally by the Delta County Treasurer.
The formula for computing taxes is as follows:
The Assessor’s responsibility is to determine the actual value and classification of real and personal property. Generally, the Assessment Ratio for real and personal property in Colorado is 29%, except for improved residential property. The residential assessment ratio must be adjusted every two years by the State Legislature to conform with the 1982 “Gallagher” Amendment to the Colorado Constitution. Under the Gallagher Amendment, that ratio is subject to review and possible change by the State Legislature to comply with the formula contained within the Amendment at every two-year re-appraisal cycle. For tax years 2015 and 2016, this ratio was 7.96%, 7.20% for tax years 2017 and 2018, and is currently 7.15%. The various mill levies are set each December by the various taxing entities. The 1992 “TABOR” Amendment to the Colorado Constitution generally requires a vote to be taken in the appropriate taxing district in order to raise a mill levy. Provisions of the TABOR Amendment regulate the increase in the revenue a taxing entity may be allowed, which can result in lowering of levies under some circumstances. The Assessor has no control of either the setting of the assessment ratio or mill levies.
Not usually. In many cases, there is no basis for a value adjustment. Many of the value changes which are made during appeal period reflect minor corrections in property inventories, which generally do not cause major value changes. As for taxes, an example of a $1,000 reduction in actual value of an improved residential property would reduce a tax bill by around $4.00 to $6.00 depending on the mill levy.
Assuming the mill levies are the same, it’s because of the assessment ratio. As discussed above, the assessment ratio for improved residential property has decreased to 7.15% for 2019. Under the Colorado Constitution and Statutes, commercial property has been and will be assessed at 29% of actual value. In other words, for tax year 2020, the portion of a commercial property’s value that is taxable is estimated to remain over three times the portion of an improved residential property’s value that is taxable. This inequity is part of the Colorado Constitution and can only be changed by a vote of the people.
From the actual recorded deeds and Real Property Transfer Declarations filed with the County Clerk & Recorder’s office. Colorado is a “public disclosure” state for real property records. When a deed is recorded transferring title to real property for consideration (money, etc.), the sales price of the real property must be disclosed to the County Clerk & Recorder and the County Clerk shall impose a documentary fee based upon that sales price (§ 39-13-102, C.R.S.). It is a crime to purposely misstate the sales price to the County Clerk & Recorder, punishable by a fine and/or jail time upon conviction (§ 39-13-106, C.R.S.). From the documentary fee, the Assessor can readily compute the property’s sales price, as well as by reviewing the Real Property Transfer Declaration. Real property sales prices are a public record and must be publicly available on the Assessor’s records; the Real Property Transfer Declaration, however, is NOT a public document.