Tag: County Assessor

This Week Property Owners Received Notices of Valuation From Their County Assessor

Note: This article is focused on the City and County of Denver. You can find three other versions focused on other counties — one for Jefferson County, one for Aurora/Adams County, and one for Douglas and Arapahoe Counties — in PDF form at www.JimSmithColumns.com.

During the first week of May in every odd numbered year, Colorado’s county assessors are required to inform every property owner of the full valuation that they have assigned to each property. Unless revised downward through the state-mandated appeal process, that valuation will be the basis of the property tax charged for this year and for 2024.

The valuation you received by letter is the assessor’s best guess as to what your property might have sold for on June 30th of the previous (even-numbered) year. That assumes, however, that the condition of your home is the same on Jan. 1st of this year and next year as it was on June 30th of last year. If your house is bigger or smaller on January 1st, that year’s valuation and therefore your property taxes must be adjusted accordingly.

The system actually depends on your participation in correcting the assessor’s valuation, which was the result of a computer-driven “mass appraisal” system, because there’s no way for the assessor’s staff of human appraisers to create a valuation of every home in the City & County of Denver. Those appraisers will, however, read or listen to your appeal of the valuation which their system generated for your home.

Bottom line, therefore, is that you owe it to yourself and to the county to help the assessor come up with the proper valuation for your home. So how do you do that?

For non-residential and commercial  properties, which pay roughly four times the property tax per $100,000 valuation, a whole industry has arisen to help property owners (for a fee) to appeal their property tax valuation.

Residential taxes are so much lower in Colorado that there’s not enough profit for professionals to make, leaving residential homeowners to fight their own battle for lower valuations and therefore lower property taxes.

The county assessors are expected to make it easy for taxpayers to determine whether the assessor guessed correctly at their home’s value as of June 30, 2022. Your first step is to find your home at www.denvergov.org/property/. Note that after you enter your address, you may need to scroll down to see and click on your address. (I mistakenly thought the website was defective and not responding.)

Once you’re on your home’s web page you’ll see a tab “Neighborhood Sales” which lists all the qualified sales that occurred during the eligible period, which is the 24 months prior to June 30, 2022.

Don’t make the mistake of thinking that a home which sold after June 30, 2022 (not shown, by the way, under that tab), can be used in your appeal. You may only cite comps which sold during that 24-month period ending June 30, 2022.

To make the list of sales useful, click on the “Square Footage” header to find homes similar in size to yours.  Once you find good comps to use in your appeal, you need to “time adjust” their sale prices.

Time adjustment is based on how much Denver homes increased in value during those 24 months. The Denver assessor has announced that the percentage increase in values from June 30, 2020, to June 30, 2022, for the City & County of Denver is 33%. Divide that by 24 months, and the increase in value for residential properties in Denver was 1.375% per month.

So, if a sale occurred six months prior to June 30, 2022, you need to increase its sale price by six times 1.375%, which computes to 8.25%. That “time adjusted” price is what you need to cite in your appeal.

Note: If, by chance, you bought your home on June 30, 2022, don’t assume that your purchase price will be the assessor’s valuation of your home, because, regardless of what you paid for your home on June 30, 2022, its valuation is based on what eligible comps indicate it should have sold for. Your home would be only one of several comps used by the assessor to value your home. 

Using the procedure described above, if you find your home was overvalued, you need to protest using an online form that is under the “Assessment Protest” tab on your home’s web page, where you can log in as “Guest.”

Your appeal is due in the assessor’s office by June 8, 2023. You can mail or fax your protest, but I recommend an in-person meeting, which you can request by calling 720-913-4164. The assessor’s office is on the 4th floor of the Wellington Webb Municipal Building, 201 W. Colfax Ave., and is open from 8am to 3pm.

If your protest is rejected, the appeal options are explained well on the Notice of Valuation letter which you received in the mail.

Proposal to Reduce Property Taxes Shouldn’t Affect Effort to Obtain the Correct Valuation of Your Home

You may have read that the General Assembly will be putting a proposal on the November ballot which would reduce your property taxes by reducing the valuation of your home by $40,000.

If your home is valued by the assessor at $400,000, your tax will be based on a value of $360,000, resulting in a 10% reduction in your property tax burden. If your home is worth $4 million, that $40,000 reduction results in a 1% reduction in your tax burden. Last year that discount was set at $15,000.

There’s also talk of reducing the assessment rate, which is currently 6.765%. That means that a home with a $1 million value has an “assessed value” of $67,650, against which the mill levy is applied.

The typical Colorado mill levy is around 100 mills which means that before those two discounts, the tax on a million-dollar home would be $6,765. With the million dollar value already reduced by $15,000, the tax is lowered by $101.47. With the $40,000 discount, the tax would be lowered by an additional $169.13.

This Week Homeowners Received Updated Valuations From the County Assessor

Taxes in Colorado can’t be raised without a vote of the people, so why do your property taxes go up every other year? The answer is simple — while the rate of taxation (the “mill levy”) can’t be increased without a vote of the people, the valuation of your home does go up based on the market, thereby raising your property taxes.

Unlike many states (for example, California), Colorado’s constitution requires that property taxes be based on the full valuation of the property. It is not based on what you paid for your house, but on what it might have sold for on June 30 of every even numbered year based on the actual sales of comparable homes in your neighborhood, with “neighborhood” defined by type of home, not just locale. One example in Golden is “high end townhomes” and skips around a wide swath of north and south Golden proper.

While the full valuation of your home for next year’s tax bill may be based on what it would have sold for on June 30th of last year, that valuation is based on what your home was like on January 1st of this year. So, if you made a major improvement since last June that was completed by January 1st and that was permitted (the only way the assessor knows about it), your valuation would be based on what your improved home would have sold for last June!

Fortunately, since the valuation of your home is based on what it would have sold for on June 30th of last year, that valuation does not reflect the extreme bidding up of home prices we have seen since last June.

The mill levy for your home is not applied to that full valuation but to 7.15% of it. That’s called the “assessed valuation.” As a quick and easy example, if your home is worth $1,000,000, the assessed valuation is $71,500, and if your mill levy is 100 mills, your tax for 2021 and 2022 for that million dollar home would be $7,150. (“Mill” is from the Latin word for thousand, so the mill levy is applied to each thousand dollars of assessed valuation. Thus, 71.5 thousand dollars multiplied by 100 mills = $7,150.)

TABOR, Douglas Bruce’s 1996 “Taxpayer Bill of Rights,” limits how much money any taxing jurisdiction can retain based on population growth plus inflation. Unless a taxing jurisdiction has “de-Bruced,” that jurisdiction must refund the excess to its taxpayers. The preferred method, however, is to lower the mill levy so that less money is collected in the first place. In some cases, the yearly decline in mill levies due to increased property values has resulted in little or no increase in the property tax bill.

Overall, county assessors have determined that home valuations increased by ½ percent per month over the 24-month assessment cycle from July 2018 to June 2020, so if your home’s 2021 valuation has increased by a lot more than 12% over its 2019 valuation, and there have been no permitted improvements or additions to your property during that two-year period, then you may have a basis for appealing your new valuation.

In my own case, the valuation increase over that period was 34.2%, so I will be appealing my new valuation, since I have made no capital improvements to my home since 2018. I won my appeal two years ago, so my 2018 valuation is acceptable to me. If you didn’t appeal in 2019, or if your appeal wasn’t successful, you may want to appeal even if your 2020 valuation’s increase is close to that 12% average valuation increase.

Any appeal must cite qualified comparable sales which you’ll only find by clicking on the “Sales” tab on the assessor’s web page for your home. Any other comps will be rejected, so don’t ask me or your own agent to find any for you. Remember to “age” the sold prices by 1/2 percent for each month that a given comp’s sale occurred prior to June 2020.

Here’s What You Need to Know About Appealing the Assessor’s Valuation of Your Home

By the time this column appears in print, all Denver and Jefferson County homeowners will have received in the mail a letter from their County Assessor declaring the “Actual Value” of their real estate holdings. The same is happening in all Colorado counties. The letters give taxpayers until June 3rd to file an appeal of that valuation which, if successful, could lower the “Assessed Value” (explained below) against which taxes will be levied for 2019 and 2020.

Property taxes in Colorado are paid in arrears, which means that the property tax for 2019 isn’t payable until April 2020, and the property taxes for 2020 will be payable in 2021. The valuation you just received in the mail, however, is not a statement of your home’s current value.  Rather, it is a statement of your home’s market (or “Actual”) value as of June 30, 2018, based on its condition on January 1, 2019.

In other words, if your house was significantly improved between June 30, 2018 and January 1, 2019, the assigned value should be what your home in its new condition would have been able to sell for on June 30, 2018, based on what comparable homes did sell for prior to that date. (You may need to read these two paragraphs a few times!)

The good news is that even though your home’s value has continued to increase since last June and will likely continue to rise for the next year or two, you will only pay property taxes for the next two years based on what it might have sold for in June of last year.

Nevertheless, many of us (me included) are going to be shocked at how much the assessor claims our homes have increased in value.

Additional good news for homeowners is that, because of both TABOR and the Gallagher Amendment — too complicated for me to explain here — the percentage of “Actual Value” against which your local mill levy will be applied keeps going down—from 21% of actual value in 1982 to 7.15% today. That percentage creates the “Assessed Value.”

To keep it simple, here’s an example using round numbers. If the assessor said the market value of your home as of June 30, 2014 was $500,000, your “Assessed Value” was 7.96% of that, which equaled $39,800.  If your mill levy was 100, then your tax bill was $3,980 (100 x 39.8).  Let’s say your home’s “Actual Value” as of June 30, 2018 rose to $600,000, a 20% increase. Your new “Assessed Value” is 7.15% of that, or $42,900. Thus, your tax bill, at 100 mills, will be $4,290, a 7.8% increase in your property taxes despite a 20% increase in market value. That’s only $90 more than if your home was worth $200,000 in 1982 when the assessment rate was 21%!

And it gets even better. Unless the voters in a particular tax district voted to “de-Bruce” the mill levy, that tax district must lower its mill levy as much as necessary to keep its revenue from increasing beyond TABOR limits based on population growth plus any increase in the cost of living.

Nevertheless, since your property taxes are the sum of multiple mill levies from various districts, that hypothetical rate of 100 mills that I used above might actually be lower this year, further reducing your property tax bill.

Here are two key points you must keep in mind when appealing the valuation assigned to your home by the Denver assessor:

1) You can only appeal the assessor’s valuation by citing comparable sales during the 24 months prior to June 30, 2018. Unless your home was mischaracterized (wrong neighborhood, style, etc.), all eligible comps are listed under “Comparables” on the assessor’s web page for your home.

2) You must “age” every comp you cite in your appeal by about 1% per month, since the median increase in our residential property values was about 24% over that 24-month period.  Thus, if a comp sold in January 2018 for $500,000, you can’t cite it as a comp at that price, but must increase that price by 6% to obtain its value as of June 30, 2018.

To find your home on the Denver assessor’s website, visit http://www.denvergov.org/property and enter your address. When your property is displayed, then click on the address and you’ll be able to click on a “Comparables” tab where you’ll be able to see exactly how the value of your home (the “Subject” property) was determined against three or more comparable sales identified by address. If you feel that those comps are not truly comparable to your home, you can click on the “Neighborhood Sales” tab and choose three or more other comparable sales and cite those in your appeal. You have to file your appeal by June 3rd.  Over the years, I’ve found in-person appeals to be most successful.

To find your home on the Jefferson County assessor’s website, visit http://assessor.jeffco.us and click on “Prop-erty Records Search” in the lower middle of the screen, then click on “Address” on the left of the screen.  “Sales” is on the top center. This is all explained on a website that I created for Jefferson County appeals, www.HowtoAppealValuations.info.