Your Trusted Real Estate Advisor

In my last post I talked about mill levies affecting the real estate taxes assessed on a property. Today I’ll explain why.

Every home, farm, commercial building, and even vacant lot is subject to real estate taxes unless exempt for some reason. Taxes are determined by two factors: the assessed valuation (by the county assessor) of the property and the mill levy.

In Colorado, due to a complicated law that we won’t discuss today, the “assessed valuation” of a residential property right now is 7.96% of the “actual valuation” of that property.

The county assessor determines what the actual value of a property is and then multiplies it times 7.96% and comes up with an assessed valuation. For example, using a home valued at $300,000, the “assessed valuation” of that home is $23,880. This re-valuation of homes is conducted every two years. We’re due for such a re-valuation in Colorado this Spring.

At the end of the year, all the taxing entities that serve a particular property determine their mills levies. State laws determine how much an increase can be. Those taxing entities might be:

· The city in which the property resides
· The county
· The school district (including special bond issues passed)
· RTD (Regional Transportation District)
· Urban Drainage & Flood Control District
· Other special districts serving libraries, fire protection, law enforcement, water & sanitation authorities, etc., depending on whether the property is inside the city limits and which services are provided by that city and therefore included in the city’s mill levy
· In certain cases there might be a “metropolitan taxing district” such as the “Stonegate Metropolitan District, Conservatory Metropolitan District, etc.

These metropolitan taxing districts can make a big difference in the tax rate. In researching for my clients mentioned in the last post I came across 7 different subdivisions with these metro taxing district mill levies:

1. 52.059
2. 50.500
3. 45.000
4. 42.827
5. 31.645
6. 27.412
7. 00.000 (this one did not have a “metro taxing district”

You can readily see that in comparing homes it will make a huge difference whether the ones you prefer are in a metropolitan taxing district and what its total mill levy is.

More about these metropolitan taxing districts next time.