Skyrocketing Property Taxes in 2023

Residential property tax is the product of three numbers:

  • The assessed value of your home
  • The assessment rate and
  • The total millage rate (mill levy).

The assessed value of the home is determined by the County Assessor, the assessment rate is set by the State of Colorado, and the mill levy is set by the County taxing authorities (schools, hospital, library, fire department, etc.).

Consider the property taxes for a house assessed at $500,000 in 2022. The State of Colorado’s assessment rate for 2022 was 7.15%. Assume an 80 total mill levy.

$500,000 * 0.0715 * (80/1000) = $2,860

Along comes 2023 and the assessed value of the home has increased by 50% to $750,000. The legislature has lowered the assessment rate in 2023 to 6.785%. They also provided a temporary $15,000 reduction in the assessed value. The 2023 property taxes are

($750,000 - $15,000) * 0.06785 * (80/1000) = $3,990

an increase of $1,130 from 2022.

The Polis proposition HH, on November’s ballot, would increase the temporary reduction to $40,000 and lower the assessment rate to 6.7%. The property taxes under proposition HH are

($750,000 - $40,000) * 0.067 * (80/1000) = $3,806

an increase of $946 from 2022.

But here’s the catch! Under proposition HH, the difference between $1,130 - $946 = $184 would be taken out of the state’s TABOR surplus (backfill). You pay less in property tax, but the taxing authorities (schools, hospital, library) still get the benefit of increased property values. You pay less in property tax, but you give up your TABOR refund forever.

The other variables are fixed. The State of Colorado assessment rate is set by the legislature, constitutional amendment, or a referendum. In 2007, the legislature, under Bill Ritter, froze mill levy rates to prevent them from being lowered. In 2020, Colorado voters shot themselves in the foot by repealing the Gallagher Amendment, which had capped property taxes for both residential and commercial property.

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Skyrocketing property taxes will effect homeowner AND renters, because landlords will pass the higher taxes to their renters.

Proposition HH lowers the property tax a little, but steals all of your TABOR refunds.

Fiscal conservative group Advance Colorado is mulling whether to move forward with a separate ballot initiative proposing a hard 3% cap on property-tax assessment increases, setting up a potential showdown pitting Prop HH against its proposal.

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The lawsuit alleges the bill behind the measure violates the state constitution’s single-subject rule for legislation and clear intent provisions.

“All of the stuff in there shows this is multiple subjects,” Michael Fields, with Advance Colorado, said. “We’re talking about TABOR refunds going to education, we’re talking about money going to renters, we’re talking about long-term changes to TABOR formula, and we’re talking about limited property tax relief in the same measure. They’re clearly trying to pair something that is unpopular with something that is popular to pass it.”

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Polis has been trying to get rid of Tabor since he got in. Not surprised.

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