Property Tax Appeals
I’m writing today to answer three common questions I’ve received from many clients regarding the recent and substantial increase in property tax assessments. Many of you, myself included, have received your Notice of Value from the county and felt the shock to see such dramatic increases over the prior assessment. The state of Colorado saw an average increase of 33% since the prior assessment two years ago, and I’ve heard many stories of 50% plus increases, including one homeowner who received a 100% increase. So here are my answers to the most common questions I have received thus far:
Why has my new assessed value increased so dramatically?
As has been well documented, Colorado experienced a historic appreciation in property values since the pandemic began in 2020. Property values hit their peak mid-2022 as the spike in mortgage rates caused significant declines in property values during the second half of 2022. This created a perfect storm as your new assessed value is not based on what your house is worth today, but rather is based on what your house was worth on June 30, 2022, at the peak of the real estate market over the past few years.
Should I appeal my new assessed value?
Maybe! Filing an appeal is a fairly simple online process with most counties. A Mass Appraisal Model (a computer algorithm) generated the comparable sales for your property which could be increasing your assessed value higher than it should be. Submitting the better comparable sold properties along with your appeal could lead to the county adjusting your assessed value lower. When you appeal you’ll be asked for what you believe the value was on June 30, 2022, and if you request a reasonable value, while supplying accurate supporting data, you have a good chance of a successful appeal.
What data should I provide to support a lower assessed value?
Better comparables! The county will only consider comparables that took place during the “study period” (July 1, 2020-June 30, 2022). However, it’s best to pick comparables that fall later in the study period as the county will "time trend" for appreciation to adjust the value for the appraisal date of June 30, 2022. Don’t pick the lowest comparables only as they might consider those outliers and discard them altogether. In addition to better comparables, you can provide any unique information about your house that would negatively affect the value such as below average condition, needed repairs, backing up to commercial space, etc.
We’re here to help! Please let me know if you or anyone you know would like assistance in pulling comparables to assist you in your appeal. And don’t forget, the deadline to file your appeal is June 8th.
