7 Steps to Potentially Reducing Your Property Taxes in Denver
Feeling Shocked by Your
Denver Property Tax Notice?
Did you just get your property tax evaluation in the mail? Were you shocked? Are you wondering what you can do about it?
I've had several people reach out for help. I've compiled a list of steps to help you decide how to handle the increase and whether it's worth it to appeal the new value.
This video and blog is to offer those real estate homeowners here in Colorado an insight into background, options and process in case you decide to appeal your new value. I'm also sharing some helpful calculations so you can determine your new tax bill and of course - offering assistance if you're ready to appeal your value!
And - depending on how much you want to geek out and learn about this - I'm including links to more resources for you, including a town hall from Douglas County. Just scroll to the bottom for helpful links.
Let's get started! Oh - and I'm Cher Revolinski with eXp Realty. I'm a REALTOR here in the Denver area and I love educating my clients and helping them navigate this sometimes crazy world of real estate.
As I've shared a few weeks ago, our Denver metro real estate values have significantly increased in the past few years - on average 44% across our cities. And this tax increase is one of the largest in 40 years!
Here in Colorado, we have the lowest property tax rate in the country. It's not the very lowest but we're pretty darn close. And we need those monies to support our education, our schools and our mental health facilities. In fact, it's one of the reasons why Colorado was first to market with legalizing marijuana was to create more tax income. And I don't know about you - but I don't mind funding our schools and I sure would like to support our law enforcement in any way possible. So in my mind, I'm going to pretend I'm writing this extra check to the BLUE as that will make me feel better!
Property Taxes Are On The Rise.
The 2023 real property notice of a valuation just came in - it looks like this. It's a postcard and it will tell you what your current value is what your previous value is, and the change in that value.
Were you shocked? I know I was. If you're like most homeowners…you're left wondering what does this new actual value of my home mean to me?
What the postcard won't tell you yet is what your actual tax bill is going to be. That notice will come out in the fourth quarter of this year. but in this video, I'll show you how you can calculate that. So this card just tells you what the County considers the value of your home.
So lets walk through how to calculate your tax changes in a way that actually makes sense.
Step 1: Get your Notice of Valuation.
Everyone should have received their Property Notice of Valuation in the mail. There may be slight variations from county to county, but most will look like ths example . For this example, I’m using a property in Douglas County. Each county will be slightly different.
Step 2: Determine if the Actual Value is appropriate.
We can all agree that home values have gone up over the last two years, quite substantially in fact. At the time of this assessment, we were at our PEAK pricing! So a bit painful right now. Re-assessments happen every odd year, so this is looking at the previous two years July 1st 2020 through June 30 2022. We all know the market was in a frenzy during most of that period.
As a bit of education - Home values are based on homes sold or refinanced (or new builds being completed) that are nearby to you and similar to yours in features and style. And crafting a home value is a science AND an art. I'm sure you've seen examples of homes selling for WAY over or UNDER what Zillow said the value was. That's why a real estate agent is necessary for determing your value - especially when it comes to setting a selling price. So back to the county assessment. Obviously the county does not do a full appraisal on each home. So your value may have gone up because of improvements, renovations, etc that your neighbor did and if they sold for a high price - your value came up! I have to laugh a little bit here as we may all be in the same hypocritical boat. I'm sure you appreciated this your value raising if you're thinking of selling as it will increase your profit. But paying taxes on an unrealized gain feels a bit different, doesn't it? At least that's how I feel. But Here's where you need to listen. For example, if your home hasn’t been renovated recently but was valued based on a neighboring home that was recently gutted, updated and remodeled, you may want to protest your value.
But don't delay! Protesting the value is best done sooner than later. Each county has a cutoff date to submit the protest. For most counties here in Denver, it's around June 1st. Which is right around the corner! The date should be noted on the Property Notice of Valuation. Fill out the appeal provided with the notice and submit. An appeal can be submitted via mail, in person or online.
As your trusted real estate agent, I can provide insight to help you. This video will help educate you on the process. I can also help validate your value as of June 30th 2022 (the end of their assessment period). And give you An idea of whether you stand a chance with appeal. I can also share comps and documentation that can help support your dispute, if you choose to go that route.
Step 3: Find County Property Tax Tate and Mill Levy
Let’s get to calculating the tax amount! There are two numbers needed to figure out how much the actual property taxes increased, the Property Tax Rate and the Mill Levy. The tax rate should be noted on the notice, for Douglas example it is 6.77%. The Mill Levy might be a little harder to find but it's listed on every county website. On the Douglas County website there are districts and each Mill leve rate is slightly different. Again - I'll provide links for Douglas County pages to help you so see description. But let's just use the one for my districkt which is 80.656.
Step 4: CALCULATE!
1. Multiply the Current Actual Value times the Assessment Rate to get the new Assessed Value (i.e. the amount you will be taxed on)
For the example above the new assessed value is $907713 X .0677 = $61,452.17
2. Then take the Assessed Value and multiply times the Mill Levy divided by 1000. This is the new annual Property Taxes amount.
For this example: $61,452.17 X (100/1000) = $4,956.48 (NEW ANNUAL TAXES)
You can compare the new Tax Amount to your past tax amount. Past tax amounts can be found on past loan statements or searching your County’s Tax Assessor website. For the example property the previous property tax amount was $3,588. Subtract the past property tax amount from the new taxes and divide by 12. This will be the total monthly amount the homeowners tax bill just changed by.
(New Yearly Taxes – Past Taxes)/12 = Monthly payment change
($4956.48 - $3,588)/12 = $114 increase every month
Step 5: Now What?!
Did you follow along? Once you calculate your increase, you can DECIDE if you feel it's large enough to dispute or maybe it feels appropriate given the rise in values.
As soon as you get this value and make your decision about whether you think it's fair, you can protest the value.
Step 6: File the Protest
There'll be instructions on the card on how to do file the protest. Every county is different. So I can't tell you what the protest instructions are. The instructions will vary by county. So be sure to to look at your date. It's likely sometime around the first of June. If you are going to protest, I recommend doing it sooner than later. I think the counties will have their hands full and as the deadlines draws near, you may get in a pinch.
And also - if you are going to protest, you'll need data to support you. And it's a pretty tedious process for any experienced REALTOR to analyze a property - even if they specialize in selling Denver real estate. So just have that in your mind. So if you need help pulling comps, reach out and let me know. But please don't wait until the last minute :-)
Step 7: Make Your List
The most actionable thing for you to do is make a note of any deficiencies you think your home has in comparison to your neighbors. Bring that to the attention of your county tax assessor. So you're gonna want to write up and evaluate everything that might be deficient or might create a lower value than what is noted on this property tax valuation. Anything that you can think of, but don't go using a comp from earlier this year, because that's too recent. This has to be done from the previous two years. So you're gonna probably need some help.
After you submit your appeal, your county will respond. Douglas County has a second appeal deadline of September 15th if you still don't agree with their assessment decision AFTER your first appeal.
The good news is that you have some time. A little time to prepare for an appeal. And several months before the rates will take affect. Just keep in mind, this may create a shortage in your escrow account in your mortgage so be prepared that you may need to send a little extra in order to pay your tax bill next Spring. Remember - taxes are paid in arrears. Which means the taxes we are paying right now are actually 2022's taxes. So this new increase will be due Spring of 2023.
Now if you're already feeling strapped by your payments or if you've had a life change that's causing you to consider a move - let's talk. I'm happy to help you evaluate your specific situation and offer insights.
Oh and don't forget - if you are a senior, there are some tax exemptions that can help offset some of this increase. Get in touch for more help!
Comment or call - I'm available to help. Cher Revolinski EXP Realty 303-884-2738