Your Trusted Real Estate Advisor

Last week I showed a client about 40 homes. They narrowed their choices to two homes about a mile apart.  Both were the same price, but one would cost them about $46 per month more.  How could that be?

Both homes had a mailing address of Aurora, Colorado.  They even had the same zip code.  However, one was within the city limits of Aurora, and the other was in unincorporated Arapahoe County.  Because the one outside the city limits is a new home, the taxes for that home had not yet been set.  So to help my clients know what their payment would likely be, I calculated the estimated taxes for them.

The key to this calculation was the tax rate. What percent of the value of the house would the tax assessor use to determine their tax bill?  To keep it simple here, let's just say that the difference came down to the total mill levy that would apply to each home.

The home in the city limits had a mill levy of 130.255 mills (or 13.255% of the assessed valuation of the property).  The other had a mill levy of 155.786 mills (or 15.5786% of the assessed valuation).  The difference of 25.53 mills meant a difference of about $46 a month in taxes for two homes of the same price.

If my clients had selected a home inside Aurora in a different subdivision only about a mile farther away, their taxes could have been as much as $164 a month less than the one outside the city limits.  One such subdivision has a mill levy of 73.303 mills as compared to the 155.786 mills of the home outside of Aurora.

In my next post I'll explain more about why this is so.  The important thing to know here is that you can't assume that taxes will be the same just because two homes in different areas are selling for the same price.  Ask your Realtor® about the different tax rates for the two properties.