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Property Tax: Filing An Appeal

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In an April 26, 2023 article, The Colorado Sun reported that “In Denver, the median increase in assessed home values, which are used to calculate property taxes, was 33%, Denver Assessor Keith Erffmeyer said. The median increase in Jefferson County was 36.5%. In Douglas County, County Treasurer Dave Gill wrote to homeowners that they should expect a 40% to 50% increase in their 2024 and 2025 property tax bills.”

What is happening?

Property taxes typically lag the market. In hard times, the value of your home goes down, and the property tax shows this reduction. Similarly, in good times, property values go up and higher property taxes follow.

Historically, taxpayers were able to deduct the full amount of their property taxes. Due to the Tax Cuts and Jobs Act of 2017, however, you can now only deduct up to $10,000 in taxes on your federal tax return. That figure includes all taxes – state income, property and sales taxes combined. As a result, the increased burden of property taxes is not alleviated by a reduction on your tax return.

Governor Jared Polis, of Colorado, has recently introduced legislation aimed at reducing property taxes (read about it here), but concerned homeowners would be wise to take action now.

What you can do:

If you believe the assessed value of your property is incorrectly reported, you may challenge the assessment. To give yourself the best chance of success, follow these tips:

Do some homework to understand the approval process to get your property revalued. It is typically outlined on your property tax statement. More information can be found on your county’s website.

Understand the deadlines and adhere to them. Most property tax authorities have strict deadlines. If you hope to be successful, you must submit your appeal by the deadline, which may be as short as 30 days from the date the property tax notice was mailed to you.

Do some research before you call your assessor. Talk to neighbors and honestly assess the amount of disrepair your property may be in versus other comparable properties in your neighborhood. Call a few real estate professionals. Tell them you would like a market review of your property. Try to choose a professional that will not overstate the value of your home hoping to get a listing, but will show you comparable sales for your area. Then find comparable sales in your area to defend a lower valuation.

Look at your property classification in the detailed description of your home. Errors in the code can overstate the value of your home. For example, if you live in a condo that was converted from an apartment, the property’s appraised value could still be based on a non-owner-occupied rental classification. Armed with this information, approach the assessor seeking first to understand the basis of the appraisal.

Ask for a review of your property. Position your request for a review based on your research. Do not fall into the assessor trap of defending your review request without first having all the information on your property. Meet the assessor with a specific value in mind. Assessors are used to irrational arguments, so a reasonable approach is often readily accepted.

While going through this process, remember to be aware of the pressure these taxing authorities are under. This understanding can help temper your position and put you in a better position to have your case heard.

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