Skip Thurman and his brother bought 40 acres in Chaffee County near Buena Vista in 2000. They have spent about $3,000 a year on taxes. But their property tax bill just nearly tripled. Thurman’s tax bill for his home in Denver’s Park Hill also surged by more than 50%.
“My entire life I’ve recognized taxes as so important for our roads and education system and everything else. But this is crazy,” he said. “Nobody can afford this.”
The sticker shock from property valuations has reverberated across all 64 Colorado counties. The wild real estate market of 2021 that saw home prices more than double in mountain communities and increase as much as 50% in metro areas is now being felt by every property owner in Colorado. Property tax bills coming due in 2024 and 2025 are set to increase by 50% or more.
And those owners are not sitting quietly with their new bills. County assessors across the state are seeing unprecedented surges of owners protesting and appealing their assessed valuations. Property owners filed at least 308,298 protests with Colorado’s 64 county assessors this year, which compares to an average of 103,000 annual protests in the last three assessment cycles in 2021, 2019 and 2017.
“I’ve been in this business for more than 40 years in Colorado, and I can state emphatically that this is the most inflation we have ever experienced in any two-year appraisal period,” said Eagle County Assessor Mark Chapin, who saw his county’s total assessed value reach $5.6 billion in 2023, up from $3.7 billion in 2021, which spurred 7,009 appeals from property owners.
That’s a 987% increase in protests filed by Eagle County property owners compared to the average of 710 protests filed in the previous three two-year assessment cycles.
“It’s just staggering,” Chapin said.
A survey of all 64 Colorado county assessors show Eagle County’s surge in protests as the highest in the state.
But not by much.
Properties are assessed every two years. The latest property valuations from July 1, 2020, to June 30, 2022, were sent in May 2023. Previous valuations from 2018 to 2020 were mailed in 2021 and notices from 2016-18 were mailed in 2019. This year’s increase in protests to the most recent valuations by Gilpin County property owners is up 824% over the average from the previous three assessment cycles. El Paso County is up 732%. Saguache County is up 641%. Rio Grande County is up 643%. Douglas County is up 624%. Pueblo County is up 622%.
“The amount of assessor-level appeals was unprecedented,” Gilpin County Assessor April Nielsen said.
If the assessor did not adjust a property’s value after an owner filed a protest, the owner can appeal the valuation to their county board of equalization. Just about every county is bracing for a tidal wave of the next-step appeals to the county boards of equalization. Counties are hiring additional referees, cutting the time owners have to plead their case and expanding the schedule for hearings from days to weeks.
“We have planned for the worst-case scenario,” Nielsen said.
Every assessor is frazzled as thousands of property owners cry foul over increases that will spike their property tax bills by at least 40%. Some owners, especially those with vacant land in mountain valleys, could see their tax bills increase by 400% or more.
“Having 1,000 County Board of Equalization hearings would be a busy year for DougCo,” said Douglas County Assessor Toby Damisch, whose office fielded more than 36,000 property owner protests this year, a 624% increase over the average number from the previous three assessments. “We’re preparing for over 3,000.”
The wave of irked owners stems from the pandemic, when thousands of new buyers stormed Colorado, spending big to escape dense urban areas. The urban exodus to Colorado’s mountain communities more than doubled real estate prices in 2021. Interest rates in 2022 were around 4% and most home sales — especially in desirable mountain valleys — resulted in bidding wars that spiked sale prices well above asking prices. The record-setting prices and deluge of new owners displaced working locals, triggering a worker shortage that lingers today.
County assessors have to set values based on set windows of time and the July 1, 2020, to June 30, 2022, timeframe was likely the wildest ever for Colorado real estate. While the market has cooled with higher interest rates and ebbing demand, assessors cannot take that recent slowdown into account. The sales between 2020 and 2022 are the yardstick for setting values for the coming tax bill.
A Colorado Department of Local Affairs tally of property in 2022 shows an average statewide increase in home values of 42% from 2021. Mountain counties saw even larger increases. Pitkin County is up 92%. Routt is up 81%. Chaffee, Eagle, Grand, Lake, Ouray, Park and Summit counties saw values increase more than 60% between 2021 and 2022.
Protests from property owners filed in 2021 were very low, with two-year assessments through June 2020 falling at the arrival of the pandemic and before the record-setting spike. Summit County Assessor Lisa Eurich said the surge in protests in 2023 follows a real estate slowdown in the past year, which makes the assessed values seem higher than actual market value.
“I believe this coupled with the unparalleled price appreciation we saw after COVID contributed to a very busy year for state assessor offices,” said Eurich, who has fielded 7,366 protests this year, a 361% increase over the average number of protests in the previous three assessment cycles.
Assessors are not responsible for tax rates or setting mill levies. They only assess property values. Local county commissioners, city councils, school district boards and special taxing districts will set mill levies in the fall. Some have already acted. Colorado Mountain College’s board of trustees in May said it would reduce its mill levy in December to keep the college’s revenue increase for the coming year near the 5.7% inflation rate.
Complicating the looming tax bill for property owners is the 2020 repeal of the Gallagher Amendment. The Gallagher Amendment limited residential property tax revenue to no more than 45% of the state’s total property tax collections. The constitutional amendment ultimately saved homeowners about $35 billion in property taxes since it was adopted in 1982. But when property tax revenues dropped during the Great Recession, a cascade of financial challenges stemming from the mix of Gallagher and the Taxpayer’s Bill of Rights threatened local budgets, especially in rural areas.
With public services ebbing under dwindling revenues from residential property taxes, voters in 2020 finally agreed with lawmakers and yanked Gallagher from the Colorado Constitution. Without the Gallagher Amendment’s limits on residential property taxes, Colorado homeowners could see the largest annual increase in property tax bills in decades.
“The voters voted to remove the Gallagher Amendment, which protected us from this large residential tax increase,” said Corbin Sakdol, the executive director of the Colorado Assessors’ Association. “That leaves us in a very difficult situation.”
But there hasn’t been a replacement to Gallagher, and that lack of fiscal relief is leading to skyrocketing property tax bills. Colorado voters in November will be asked to approve a 10-year plan proposed by Gov. Jared Polis that could reduce refunds under the Taxpayer’s Bill of Rights to help offset a dizzying spike in property tax burdens.
Polis’ Proposition HH plan would cut the statewide assessment rates for residential and commercial property for the next decade while also cutting refunds under the Taxpayer’s Bill of Rights, or TABOR. Opponents have sued to block the ballot question and are proposing a voter measure that would cap annual property tax increases at 3% on properties that have not been improved.
Thurman hopes Colorado lawmakers can take a cue from California, which has limited annual property tax increases since 1978.
“Imagine being on a fixed income or being a 30-year-old who stretched themselves thin to afford a home in this state and trying to pay this new tax bill,” he said. “So many people are going to have to sell. Unless something changes, this will dramatically change the ownership of property across the state.”
Source : Colorado Sun