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1. How are property taxes determined?

Property tax is calculated by multiplying the assessor’s appraised (actual) value of the property by the assessment rate to get the assessed value. The assessed value is then multiplied by the mill levy.

2. What is a mill levy?

Mill levies are the rates of taxation set by each taxing authority, not the Assessor’s Office. Each tax authority has a district boundary. A taxpayer’s total mill levy is calculated based upon where their property is located. The county, towns, schools, and special districts each have a separate mill levy, which is indicated on the annual tax bill you receive from the county treasurer. 

3. What is an assessment rate?

The assessment rate is the percentage paid by a taxpayer based on property classification. 

4. When will I receive a Notice of Valuation?

The assessor is required to send you a Notice of Valuation for real property on or before May 1 of each year. 

For intervening years, a notice of valuation included with the tax bill shall fulfill the requirements of C.R.S. 39-5-121(1.2).

5. How is the actual value determined?

The assessor is required to equitably value all property in the county according to Colorado statutes. Real property is reappraised by the Assessor’s Office every odd numbered year. The value determined by the assessor for the year of reappraisal is generally used for the intervening year also. The real property is valued as it existed on January 1 of the current year. The appraisal data used to establish real property value, in a reappraisal year, is from the prior 24 month period ending June 30. Residential property can only be valued based on market sales, per Amendment 1 of the Colorado State Constitution. For all other property classifications, the Assessor’s Office must consider the cost, market, and income approach.

6. What are the appraisal methods?

Market Approach - The market approach is the most direct method of appraisal. Sales of similar properties are compared to subject properties to establish a value estimate. Market value is the most probable price expressed in terms of money that a property would bring if exposed for sale in the open market in an arm’s length transaction between a willing seller and a willing buyer, both of whom are knowledgeable concerning all the uses to which the property is adapted and for which it is capable of being used.

Cost Approach - The cost approach estimates the material and labor costs to replace a building with a similar one. If the building is not new, the appraiser must consider its age and how much it has depreciated over time.

Income Approach - The income approach may be considered for income producing properties. This method considers the landlord’s income and operating expenses, and the financial return most people would expect from a given type of investment property.

7. What is time adjustment?

39-1-104 (10.2) (a) (d) CRS Establishes the reappraisal cycle/data gathering period/appraisal date and concludes "said level of value shall be adjusted to the final day of the data gathering period."

Time Adjustment Methodology When price levels are changing significantly, sales prices must be adjusted for time. Separate time adjustment factors, by type of property and geographic area, may be necessary as rates of change in real estate prices often vary with these factors. Most appraisal organizations, such as the Appraisal Institute (Institute) and the International Association of Assessing Officers (IAAO), recognize the need for time adjustment (trending) of sales prices to the date of appraisal.

Determination of market adjustments for time involves the consideration of the four basic techniques of time trend analysis:

• Resale Analysis - the advantage of this technique is that it minimizes quality and location adjustments; however, characteristic changes between sales must be accounted for. The disadvantage of this method is the limited number of these types of sales.
• Paired Sales Analysis - This is a reliable method in areas where homes have minimal differences. This method works well in condominium complexes.
• Multiple Regression Analysis - This is a reliable tool for evaluation of the influence of several independent factors, such as property characteristics or time, on a dependent variable such as sale price.
• Sales Ratio Analysis - This reliable technique is efficient in that it inherently allows for large sample size. It does not require adjustment to the sales, in that it implicitly considers such factors by expressing sale price to assessed value, which should already reflect all relevant physical and location factors.