RBC — Due to the economic downturn, property owners in western Colorado may be expecting to see their 2009 Notice of Valuation showing a lower amount than their 2007 value. In most cases, their value will have increased or will remain constant. However, the real estate market in Moffat County and Rio Blanco County has proven to be stable.
Under Colorado law, county assessor’s offices throughout the state conduct a complete reassessment of all properties in their county every two years. The Colorado Legislature sets the appraisal date and the annual calendar for the assessment process. The property valuation reflects the real estate market activity from Jan. 1, 2007, to the current appraisal date, June 30, 2008. This valuation is mailed to taxpayers on May 1, 2009.
Because the volume of sales has decreased during this same period, the perception of property owners, especially those who have had their property on the market for a length of time, is that values are dropping. However, in general, that is not the case. Our values are not based on the number of sales but on the sale prices of the properties that have sold. Even taking an unofficial look at the sales from July 2008 through December 2008 shows that sales prices of single family residences are remaining stable.
This year, 2009, we must determine the market value (also known as “actual” value) of your property as of June 30, 2008. Actual values are determined after careful analysis of sales from the marketplace prior to June 30, 2008. This value is used as a basis for 2009 and 2010 property taxes (payable in 2010 and 2011).
To derive the property tax, the actual value of the property is multiplied by the assessment rate. This result is then multiplied by the total mill levy specific to each property. The assessment rate for residential properties is 7.96 percent this year and 29 percent for most other properties.
The differences in assessment rates between residential homes and other types of property is the result of an amendment to the Colorado Constitution (known as the Gallagher Amendment) approved by the voters in 1982, which limited the residential share of the property taxes. The state legislature adjusts the residential assessment rate each reappraisal year to keep the property tax burden from shifting to residential property. This is the Gallagher Amendment in action.
Each property owner shares in providing revenue for local services including schools, police and fire protection, local government and public health. The Colorado property tax system is designed to fairly and equitably distribute taxes according to the value of the property.
By Renae Neilson, Rio Blanco County assessor.