Property Tax Valuations - Time is Running Out to Appeal in Colorado

The Colorado Residential Property Tax Cycle and How to Appeal Your Value

I’ve had more calls than I can count on this subject over the last two weeks so thought it would be good to provide some education on the basic property tax cycle in our state, along with things to consider if you feel the value noted on the statement you received recently from your County Assessor is too high.

The property tax process is not run by a single state department. All counties in Colorado follow the same general cycle and timeline, using rules set by our state constitution and/or by our state legislature, yet each County Assessor’s office then administers the process in their own way. There are some clear standards they all must follow, and then allowed differences that exist from county to county. Every county has their own Assessor’s Office website, for example, and they are all different. If you are researching this topic online or will be submitting an appeal please make certain you are using the website for the correct county. ?

The Assessor’s responsibility is to?maintain accurate real estate records and use the data to value and assess real estate and personal property located within the county. Contrary to popular belief, the Assessor does not calculate taxes, collect taxes, set tax rates, or create tax bills. The Assessor is only concerned with property values, not with taxes.

The Basic Tax Cycle

Every county must evaluate and assign a market value to each residential property in the county every two years. This valuation process is done across the state by May 1st of each odd numbered year, with a Notice of Value (NOV) sent to each property owner shortly after. ?(These are the notices we recently received.) This value stays with the property for two years, unless there is a change made to a property that causes a revaluation. ?

The valuation date used is June 30th of the prior year. All Assessor’s Offices review sales of comparable homes for a period going back at least eighteen months before that June 30th valuation date, and they may go back further (in six month increments) if there isn’t sufficient data on which to base an evaluation. Values of homes that were sold before the June valuation date are then “time adjusted” to bring their data current to that June 30th valuation date. (For the recent notices, the valuation date used was June 30, 2022, using data gathered from sales that closed from January 1, 2021 through June 30, 2022. Some Assessors may have gone back to July 1, 2020, if more data was needed. The prices of all sales used in their analysis would have been reviewed and adjusted based on market conditions from the time of the sale until the June 30th valuation date. If you have a newly built home or one that has had a major addition in the last year, you should know that they look at each property as it existed on January 1st of this year and apply that classification when calculating the value on your notice. That means that if the property was raw land on 6/30/2022, but had a nice new home on it by 1/1/2023, the Assessor’s office will calculate the value as if the house was actually in place on 6/30/2022. I think most would agree that since the values on the current Notice of Value will be used to calculate our property taxes due for all of 2023 it makes sense that owners of new homes built last year would be taxed for a property that includes a house on it, not just for a vacant lot.)

June 8th (in odd number years) – this is the last date by which a homeowner may submit a request to appeal the property value the Assessor’s Office has calculated. Be sure to check your county website for details on this. They may have a slightly different date, and may specify if the appeal must actually be “received” by the deadline or if it just needs to be “postmarked” by that date.

The Assessment Rate is a set percentage of the Actual Market Value across the state. It has been temporarily reduced to 6.765%, from 7.15%, for the last few years by the Colorado legislature.?

The actual Tax Rate (or Mill Levy total) is determined by each individual taxing authority (the county, cities and towns, school districts, metro districts, fire and police protection districts, library districts, etc.) in the fall each year.?The mill levies are added together and a total tax bill is sent out to all homeowners each year in January. You can see a list of all your applicable mill levies on a detailed version of your tax bill, available on your county website.

The property tax bill using our new Market Values won’t be sent out until January of 2024, and we do not yet know what our final tax bills will be. We only know, so far, what the county has calculated as the Market Value of our homes that will be used in the equation above.

Should I Appeal My Market Value?

That depends. Look at the value on your notice. Keep in mind that our average sold prices in the Denver area hit a record high in April of 2022, and May and June were just a little below that. The applicable date for the valuation is 6/30/2022. Could you realistically have sold your property last year in June for the value listed on the Assessor’s notice? If so, the value is probably accurate. Taking the time to submit an appeal may not make sense.

I’ve heard from two local Assessors that the appeal success rate over the last decade or more has been in the 25% to 50% range, although that doesn’t mean each owner received the full amount of the adjustment they were requesting.

The Assessors are all expecting to receive many more appeals this year than ever before, and they cannot know yet what the success rate will be this time around.

The Appeal Process and Some Suggestions

It’s important that homeowners go to the correct county website to ensure they are following the specific appeal process as outlined by the Assessor for the county in which a property is located.???

Most counties accept appeal applications electronically on their website, by fax, by email, or paper copies can be mailed in or dropped off at the locations listed on their website. You may visit the Assessor’s Office in person and talk to someone live (you may need an appointment for that). You may also submit an appeal by simply mailing back the postcard you received with a desired value indicated?on it, but unless you are giving them new information to work with that’s not likely to get you your desired result.

I do know that several of our local Denver area counties have a limit for the number of photos that can be attached to an appeal application that is submitted online. In those counties if the supporting documentation for your appeal will include more than five photos you will need to print out your application and documentation and either mail in or drop off your packet. Since each website is different please check on the available options for your county.

If you think the Market Value on your Notice of Value (NOV) is too high here’s what you can do to appeal:

1.??????Go to your county website, find the section for the Assessor’s Department, and search for your property.?Some Assessor websites are more user friendly than others. It may take a few clicks to get you to the information you need about both your home and the appeal process in your county.?

2.??????Look at the “public record” characteristics about your own property on the county website. Are the facts all accurate? Consider the age of your home, the square footage (overall, finished, and unfinished), the lot size, the number of bedrooms and baths, the number of garage bays, information on the roof and mechanical systems,?number and type of outbuildings, and any other details about your home. Keep in mind that if the county is not aware of a finished basement (so additional living space that’s not noted in the public record and/or a higher number of bedrooms and baths) or another addition, or that you replaced a wood shingle roof with a new one made of hail resistance composite shingles, or made other improvements, your value would likely go up if their records are corrected. The counties all would very much like to have true information in the public record, so they can use correct data to fairly evaluate ALL homes in the county. It’s up to you if you want to provide them with information to update their records, especially if those changes might increase your value (now or in the future).

3.??????Look at the comparable sales they used to calculate your value. You may need to dig around a bit on the website to find this information but it will be there somewhere. Are the facts about each property accurate, as far as you know? Since the “comps” they used are likely near your home, you may be privy to information of which the Assessor’s Office is unaware. If you know there are factual errors in the data for the “comps” used you may want to include the correct information for those sales in your appeal.

4.??????I’ve been asked about the choice of “comps” the Assessors have been using and honestly, with all the technology tools available to Assessors, appraisers, and real estate professionals these days, from what I’ve been seeing the comps being used are actually pretty good matches, assuming all the information for both the subject property and the sold “comp” is correct in online records. A more common issue is that the facts about a home are not all correct, so the sales being used are not really comparing “apples to apples”. In this case, I might notify the Assessor’s Office so errors can be corrected and then ask for better comparable sales to be used in the valuation.

5.??????Review each comparable sale the county used and compare it to your own home.?If you do a Google search using the “comp” address in most cases you will see the listing photos and notes the listing broker entered in MLS when the home was on the market for sale. Many sellers upgrade and prepare their homes well before listing them for sale. If your home is not as updated or is not in as good a condition it could be worth less than the value indicated on your notice. The reality is your county has no way of knowing about all the subjective aspects of your home (if it needs paint inside or out, if the kitchen and baths are forty years old and all original and badly worn, if you have new flooring throughout or old sheet vinyl and pet-stained shag carpeting, if you have gorgeous mountain views, if you have structural problems, if your driveway or fencing should be replaced, if your yard is beautifully landscaped with a great outdoor living area or if your dogs have destroyed the backyard, etc.). If your home clearly was not as nice as those sold during the review period you should let the Assessor’s Office know the details of that in your appeal. They can and will consider both “quality” of finishes and “condition” of the property as factors.

6.??????Submit good documentation! This greatly increases the odds your value will be reduced. This may include photos of features of your home that would have detracted from its value on 6/30/2022, a copy of an appraisal that was done if you purchased or re-financed your home during the time period being reviewed, copies of estimates or bids from contractors that you had visit your home during the review period (if work was not completed by 6/30/2022) or receipts for needed repairs that were made after the review period (to correct a problem that existed on 6/30/2022). Be clear and concise and submit good quality photos. Your goal is to show the licensed appraiser who will review your appeal exactly why your home would have been worth less on 6/30/2022 than the Notice of Value indicates.?

The best recommendation I’ve heard, from several different Assessors actually, has been to make sure your appeal tells them things they don’t already know. Give them the information they need so they can lower your value.

Important Things to Remember

The Assessor’s Office does not set our assessment rate nor do they set our mill levy rate. Their job is simply to provide the county with an appraised value for each home as of 6/30 every other year. Your appeal request should not be political in nature, nor should it include complaints about high tax rates or the economy in general.

Be mindful of the due date for appeals to be filed in your county. Late applications will not be accepted.

Remember the valuation date being used is 6/30/2022. Sales of comparable properties at any time after that date cannot be used in this process. Also, sales back to 1/1/2021 may be used, but they will have a “time adjustment” applied. Going back six months further may be possible, but only if there aren’t comparable properties that sold during the eighteen month period. Not using the correct time period is the most common reason appeals fail.?

What Happens After I Submit an Appeal?

The Assessor’s Office will assign a licensed appraiser to review your appeal.

After their review they will send you a Notice of Determination (NOD). This will happen in the July to August timeframe. Check your specific County Assessor website for the deadline in your county for them to be sent out.

If you don’t agree with their decision you may appeal again to your County Board of Equalization (CBOE). Your appeal will be reviewed at this level by a board of appraisers hired by your county.

If you don’t like the CBOE decision you can go one level higher, to the Board of Assessment Appeals, which is a state organization.

What If I Just Don’t Like the Property Tax Process in Colorado?

If you wish to dispute how taxes are calculated or assessed or collected you should:

• Contact your elected officials now and express your opinions and concerns.
• Look up your tax bill detail and print out your mill levy list so you know which taxing authorities receive funds from your property tax payment, then look up each individual taxing entity and see when and where they are holding their public meetings. Attend those meetings and provide input. These meetings happen every fall and the public must be allowed to attend.?
• Vote each November, and before you do make sure you understand all the ramifications of each ballot issue. ?You should also understand the platform of any candidates on the ballot, so you vote for those with views similar to yours.?

You should know that as voters “we the people” in Colorado chose in 2020 to repeal the Gallagher Amendment, which had been in place since 1982. That amendment had limited how much our real estate property tax bills could go up each year. The result is that now we all are facing much higher tax bills next year, not just because of valid higher valuations due to very real market price increases, but because we chose to remove the measures that had been put in place decades ago to prevent property taxes from escalating out of control.

As it stands right now there will be an item on our ballots this November called Proposition HH. It was submitted by our governor at the very end of the legislative session a few weeks ago. While it does contain a few features that will help reduce a little of the tax bill increase caused by higher property valuations, two Assessors have said in the last week that it will only cause about a 10% reduction in the new tax bills in their counties, not nearly enough to offset the impact of the higher market values. Most counties had value increases over 30%, and some were very close to 100%. The Assessors’ opinions are that the bill as written just doesn’t do anywhere near enough to provide the needed relief.

What Else Should I Know?

If you or your spouse are a homeowner in our state and were over the age of 65 as of January 1st this year, and you’ve owned your home for more than ten years, you may be entitled to a Senior Tax Exemption. Under the current rules this program will exclude 50% of the first $200,000 of property value, so would reduce your market value on which your assessment is based by $100,000. Proposition HH would increase that reduction a bit more, and add in the “portability” feature, so an owner would not need to start over on another ten year qualification period if they buy a different home in our state.?There is also a partial exemption program for Disabled Veterans in our state.

Please call me at 303-589-5494 if you have questions about anything related to this process!

Please see your County Assessor’s website for more information and appeal applications.

Adams County:?https://adcogov.org/assessor

Arapahoe County:?https://www.arapahoegov.com/assessor

Boulder:?https://bouldercounty.gov/departments/assessor/

Broomfield:?https://www.broomfield.org/164/Assessor

Denver County: https://denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/Department-of-Finance/Our-Divisions/Assessors-Office

Douglas County: https://www.douglas.co.us/assessor/2023-2024-property-valuation/

El Paso County:?https://assessor.elpasoco.com

Elbert County:?https://www.elbertcounty-co.gov/268/Appeal-Information#

Jefferson County:?https://www.jeffco.us/658/Assessor

Park County: https://www.parkco.us/770/Appeals-Process

Teller County:?https://www.co.teller.co.us/Assessor/AppealsProtests.aspx

Provided by Lynne Hannifan, HomeSmart ELITE Group, 303-589-5494.??Copyright 5/16/2023 by Lynne Hannifan