Tens of thousands of Coloradans are protesting rising property assessments that threaten to take far more out of people’s pockets than in previous fiscal years.
The sharp increase in protests also means a significant increase in the workload for county councilors and their staff and, later, for county commissioners and district courts who ultimately have the final say on the amount of tax liability each property owner faces.
In Arapahoe County, commissioners extended the deadline for sending “notices of determination” — the assessor’s initial response to tax protests — to Aug. 15, instead of June 30. The county saw a nearly 600 percent increase in protests this year compared to 2021, the last time property values were assessed for tax purposes.
Unlike some states, Colorado does not limit property valuation to determine tax liability, meaning that a 40% increase in market valuation translates to roughly the same amount in increased assessment of taxes, with some adjustments for increases or decreases in mill rates made by local jurisdictions and a decrease in the assessment ratio adopted by the state.
Appraisals were expected to rise, following the hot market of 2021 and early 2022. As a result, the median residential home valuation increased 33% in the city and county of Denver, 42% in Arapahoe County and 47% in Douglas County. In fact, all nine counties in the metro area showed double-digit increases near the 40% mark.
Denver and Boulder showed the steepest increases in apartment valuations at 45% and 44%, respectively.
The revaluation of property values occurs every two years, and next year’s property tax liability would reflect increases in market value in June 2022. That means the new numbers that will be used by the tax collectors next year will register the considerable increase in values, reflecting the appreciation of the market. peak in the spring of 2022, but little or no fall in values as the market cooled later in the year.
Anders Nelson, the spokesman for Arapahoe County, said the protests usually come from residents who don’t believe their property is worth what the assessment was determined to be.
“Typically, the resident feels the value is too high and wants to lower it so the taxes are lower,” said Anders, who noted there are several opportunities for residents to appeal assessments.
Brenda Dones, a Weld County assessor and president of the Colorado Association of Assessors, explained the dilemma facing property owners, especially if they were hoping the newer, quieter market would help them avoid paying a greater tax liability.
Dones pointed out that the window to make the first appeals is already closed, and the owners are now waiting for the determinations of the advisers’ offices.
“When they receive the decision, I encourage them to try to understand why the property value was adjusted or denied,” Dones said.
For fiscal years 2023 and 2024, the valuation date is June 30, 2022.
“Many sales occurred during those two years, and appraisers must adjust these sales prices for market economic changes through June 30, 2022. In most markets, properties that sold in 2021 were selling for more in June 2022. Therefore, selling prices had to be adjusted to capture this appreciation,” he said.
“We are now 12 months past the valuation date and current sales prices could be lower than the value set on June 30, 2022. However, valuers are prohibited from considering these sales until the next revaluation in 2025,” he said. “If, at this time, sales prices are lower, property values will adjust to reflect that economy.”
Dones said that if property owners take these points into account and still believe the assessment is incorrect, they can file another appeal with the County Board of Equalization.
He said they will have a better chance of success if they provide financial information, ideally sales, that occurred in the two to three months before June 30, 2022. Those sales, the appraiser said, would be close to the date of valuation and, therefore, most of the appreciation would already be captured in the sale price.
Sales could then be adjusted for feature differences to estimate value, he said, adding, “This is like an appraisal to get a mortgage.”
Dones added, “Owners should also know that property value is only one part of the property tax formula. Owners can also talk to their legislators about assessment rates and their local taxing districts (city, county, fire, etc.) on whether mill rates should be adjusted before taxes are calculated.”
Democrats in the General Assembly tried to offer tax relief by taking a portion of the surplus from the Taxpayer Bill of Rights, which pays for TABOR refunds, and diverting it for at least 10 years to homeowners and commercial properties. They also equalized the Taxpayer’s Bill of Rights refunds to $661 per individual or $1,322 for joint filers, a unique change from the current system that bases TABOR refunds on income levels.
Voters will have a chance to reject or approve the proposal in November. Battle lines are already forming and both sides have begun to present narratives that will likely play out during the campaign.
Mark Samuelson contributed to this report.
