Property Tax Appeal

HomeLab has over ten years of experience working for local assessors, so we are familiar with the process of valuation as well as appeals. A reduction in value can offer significant savings, as it often lasts much longer than the year in which it was appealed. It often serves to “reset” the deal, especially if discrepancies are corrected, such as size, basement finish, quality, or condition. These are issues that could artificially raise your property value every revaluation. We recommend one of three options for most clients, but it depends on your specific property and needs.

You often don’t require an appraisal to be successful at a property tax appeal. Still, if one indicates you are overvalued, especially if done as of the same effective date, it is tough for an assessor or potentially a board to dispute.

In Colorado, properties are re-appraised every odd year (2019,2021,2023), but it is also possible to appeal in intervening years. For the most part, Colorado relies on the sales comparison approach to value the property. The assessor depends on whatever data they have on your property. Because the assessor is valuing a universe of properties, it is easy for things to fall through the cracks. If something specific about your property is affecting value that the assessor may not be aware of, this is your best chance at a reduction in value.

How are my taxes calculated?

Multiple factors determine your property taxes in a given year. It must be explained that this page is titled “Property Tax Appeal,” but that is incorrect. That is how most people view it, but you cannot appeal your taxes. You can appeal your valuation, which directly correlates to your taxes. Your taxes are based on your valuation, so if your valuation is lowered, your taxes will be less than they would have been. However, it does not guarantee they will go down from the previous year. Remember that taxes are not set until after valuations have been done and the initial appeals have been completed. So you will not know your taxes when you appeal your property value. Your taxes are set based on a formula unique to your location. First, you take the assessment rate (29% for Commercial properties, ~6.95% for Residential, this can vary) and multiply that by your value to get your Assessed Value. You receive your notice of valuation by May 1 every year. You multiply your assessed value by your mill rate/1000. Your mills are determined by local commissioners, schools, special districts, etc., and are unavailable until December after your valuation. So you won’t know your taxes until later, but you could use the last mills as a proxy until then.

Example:

Residential home Notice of Value on May 1: $500,000
Assessment Rate: 6.95%
Assessed Value=500000*.0695=34750

*It should be noted that assessors are required to split the values between land and building, but on an improved property you cannot appeal these values separately. So it doesn’t really matter how they split it up, only the total is relevant.

Mills: 120 (This value ranges significantly depending on your exact location, some newer areas have “Metro Districts” which by themselves can account for 60-100+ mills)

Mills 120/1000=.12

Taxes Due=Assessed Value 34750 * .12=$4170

Property Valuation Appeal (Tax Appeal)

Again, you are not appealing your taxes; you are appealing your value. Understanding this can go a long way when discussing your property with the assessor, as they will know you are knowledgeable about the process. For most counties, you can do this online during May. Otherwise, your notice of valuation will have instructions on how to proceed by mail or phone. The main thing is, do not appeal with no plan or evidence.
In most cases, you will be wasting everyone’s time. Sometimes you may get lucky and get a reduction, but it is always better to be prepared. If anything, the assessor will appreciate it and may give you the benefit of the doubt if it could go either way.

If you want to increase exponentially your chance at a value reduction, you must first determine that your property is overvalued, and then support this with actual evidence that is relevant. That is where Homelab can help. We can give you the tools and evidence you need. Generally speaking a well developed appraisal that is specifically done for this purpose (meaning efffective date matches appraisal date and condition is based on Jan 1) is your best tool. But, it is also your most expensive option. So, if you go with that option you want to be pretty sure your property is truly overvalued. An appraisal will be unbiased, meaning it does not guarantee the value will come back less than your assessor value. If you are unsure or feel it may be close, you might be better off just doing a consultation with us. We can essentially coach you on how to appeal the property, what things to focus on, what evidence to provide, etc. This would be the most cost effective option, but it is all up to you, you will not have a professional opinion of value to back you up. People have been successful both ways, it really depends on your specific situation.