Families may still be reeling from the new property values they received weeks ago from their county assessor’s offices, but what they pay in property taxes may end up looking different in the end, depending on a number of moving puzzle pieces that include actions at the local and state levels.
An unusually high increase in residential property values in Colorado — fueled by a costly real-estate market — has put property taxes on the front burner in local politics.
It’s “the most impactful reappraisal that’s ever happened in the state of Colorado,” Toby Damisch, the Douglas County assessor, told an audience at a May 24 in-person and remote town hall event that discussed the issue.
Home values — as calculated for property tax purposes — have spiked since the last time homeowners received notices of value two years ago. Since then, residential properties in the Denver metro area typically saw value increases between 35% and 45%, a group of county assessors from around the Front Range announced April 26.
In notably affluent Douglas County, residential properties saw increases between 30% and 60%, with a median of 47%.
Colorado law requires assessors to value properties every two years, according to Douglas County’s website. The property valuation that homeowners recently received is based on June 2022 data, near the recent peak in the real-estate market.
So even though home prices have declined since then, property values reflect last year’s exceptional highs. And when property values increase, the tax bills property owners pay also go up — even if the tax rates themselves don’t change.
Here’s a look at some key points local officials discussed at Douglas County’s town hall event.
Taking issue with a ‘cap’
Stepping in to potentially blunt the impact of high property values is Proposition HH, a measure Colorado voters may see on their ballots in November, pushed by state Democrats.
What Coloradans pay in property taxes depends on a few numbers. Local government entities like counties and school districts set the tax rates. (Property tax rates are officially called “mill levies.”) Also at play is the “assessment rate,” another number that helps determine how much in property taxes a person owes. The state legislature sets the assessment rate.
Among other things, the Democrats’ plan, according to the governor’s office, includes:
• Reducing the residential property assessment rate to 6.7% in 2023 and 2024, and continuing that reduction for primary residences — not second homes or investment properties — in future years.
• Capping the growth in district property tax collections, excluding school districts, at inflation and allowing local governments to override the cap after giving notice to property owners.
Damisch took issue with the “cap” part of the proposal, saying: “How is it a cap if it’s optional?”
“And you don’t get to vote on it. I don’t get to vote on it. Those entities that are running those (local government) authorities get to make the decision as to whether they’re going to implement their own cap or not,” Damisch said.
He added: “If you look at their history, they rarely, rarely decrease their mill levy unless they’re required to do so.”
How it adds up
Damisch provided an example scenario of the effect that Proposition HH, proposed by the state legislature’s passing of state Senate Bill 23-303, would have on homeowners’ tax payments.
An example home in Highlands Ranch, valued at roughly $583,000 in 2022, paid a tax of about $3,700, according to Damisch.
Now, that property is valued at about $857,000. Under current circumstances, the home’s property tax payment would total about $5,200, according to the county’s data. That’s about a 40% increase from before.
Under SB23-303’s policies, that tax payment would fall to about $4,900, which would instead be about a 33% increase from before.
Damisch felt the potential relief was too small and pointed out that the Democrats’ proposal would also affect TABOR refunds, or the money that Colorado residents receive under the Taxpayer's Bill of Rights, which limits the amount of money that the state government can collect and spend, or save, each year.
Revenue above the limit — sometimes called a “TABOR surplus” — generally gets refunded to taxpayers. TABOR is an amendment to the Colorado Constitution.
Path forward for HH
State Rep. Lisa Frizell, a Douglas County Republican, noted that “the only thing that needs to go to a vote of the people” is a change to TABOR policy.
“That assessment rate should have been lowered legislatively. We should not even be having this conversation. The legislature should have taken care of business,” Frizell said at the town hall.
Property taxes partly fund county governments, but they also fund school districts, fire and library districts, and other local entities.
Because a drop in property taxes would affect those local entities, part of the Democrats’ plan was to include “backfill” revenue to fire districts, water districts, ambulance and hospital districts in areas of the state that aren’t growing as fast as others by dedicating a portion of the state TABOR surplus to backfill, according to the governor’s office.
In support of Prop HH, Anneliese Steel, representing an organization called Colorado Concern, said that under the proposal, “You’re getting substantially more property tax reduction than you are getting in TABOR relief.”
But whether the proposal makes it to the November ballot — and how it would look if it does — is unclear. The Douglas County commissioners announced they would join a lawsuit to challenge the measure that looks to put Prop HH on the ballot.
The primary focus of the legal challenge is the subject of the proposal, which plaintiffs claim violates the state’s single subject and “clear title” rules. The commissioners believe the title of the proposal is misleading and does not clearly express the subject of the proposal.
Depending on how the conflict unfolds, the state legislature could meet in a “special session” to reintroduce provisions of SB23-303, Commissioner George Teal noted.
If you need relief
Commissioner Lora Thomas urged the public “to find out who your elected people are” and voice concerns about the tax rates that they set.
Damisch also mentioned the tool of a “property tax deferral” as another way to find relief.
The legislature passed a measure in 2021 aiming to ease people’s financial burden by letting them defer payment on some of what they owe on their primary residence, The Colorado Sun reported. The deadline of April 1 to apply for the deferral has passed, but it might be worth looking into for future years.
For more information, see treasury.colorado.gov/property-tax-deferral-programs, call 833-634-2513 or email email@example.com.
For those who feel the county assessor’s office assigned an inaccurate value to their property, June 8 is the deadline to file an appeal with the assessor’s office, Damisch noted. Those who aren’t satisfied with the results of that process can appeal to higher levels of review.
For information about the senior property tax exemption, other relief and the appeal process, contact the county assessor’s office at 303-660-7450 or see douglas.co.us/assessor.