As an odd-numbered year, 2017 means that Colorado’s assessors report to property owners the value of all individual real estate properties in each county.
Some time this month, the La Plata County Assessor’s Office will send property owners a Notice of Valuation, either electronically or by mail, informing them of the value of their real estate as it physically existed on Jan. 1, 2017.
Every two years, county assessors benchmark property values to a specific date. This year’s cycle measures value changes from July 1, 2014, trended to June 30, 2016. The value placed on your property is the price it would have sold for on June 30, 2016, analyzed statistically. The Notice of Valuation numbers that you receive in May become the basis of property taxes for 2018 and 2019.
Our studies have shown steady value increases in many locations and over most property types in the county. Low interest rates, shortages of properties for sale in some areas and our growth in population have moved property values upward – and this trend is continuing.
During the last data collection period, 2012 to 2014, the foreclosure market shrank as the economy improved and population grew. Real estate availability in La Plata County is tight and market values strengthened during that period. The rising real estate value trend is beginning to show across most areas of La Plata County and much of Colorado. Values are soaring in five Front Range counties, but the Western Slope is seeing rising property values as well.
Look around your neighborhood. Are there new people moving in? Is there new construction? Are schools and stores upgrading? For the real estate market and assessors offices, we look to these factors, as they ultimately influence the market of all the properties we track and visit.
Adding to the complexity of residential property value is the Gallagher Amendment. Colorado voters adopted this amendment in 1982 and, among other things, the amendment dictates that the residential property tax collected throughout Colorado cannot exceed a certain percentage of total property tax – commercial and residential combined. Practically speaking, this means when residential property values soar – as has been the case in five counties in and around Denver – the amount of a property’s actual value that is taxed drops. This assessment rate adjustment has not occurred since 2003, and is the reason that residential property will receive a tax break when the assessment rate falls from 7.96 percent to 7.2 percent of actual value for the 2018 tax year. This Gallagher adjustment will mean lower property taxes for residential property owners.
For example, for 2017, a $300,000 residential property would have had an assessed value of $23,880. This amount, multiplied by the total mill levy for Durango, for instance, would result in $778 in taxes. For 2018, that $300,000 residential property will be assessed at $19,680, resulting in a $641 tax bill at the same mill levy rate.
This reduced residential rate does not have a corresponding increase for commercial properties, and the overall effect is that taxing entities throughout the state will receive less revenue from residential properties. La Plata County anticipates that this adjustment will reduce total property tax revenues for the county by approximately $400,000 in 2018.
Agricultural land values will be increasing on this year’s notice of valuation, but this increase is based on a different statutory market formula. This formula takes into account the 10-year average price of commodities: hay, wheat and animal land rents.
This year, the formula dropped two years of lower commodity prices – 2004 and 2005 – and added 2014 and 2015 to the 10- year average. This, coupled with lower expenses for fertilizer, herbicides and fuel prices in general, has caused agricultural property values to increase.
Please read your notice of value statement closely. We include in the mailing an insert that clarifies the period of sales we are using for valuation. If you have questions or comments, please contact my office at 382-6228. We are happy to consider matters of valuation at any time.
The La Plata County Assessor’s Office also offers e-notices. Sign up and save tax dollars. On the front of your notice of valuation, there is a “verification code” which you can use to enroll in paperless notification of assessor’s office information.
Feel free to use our property database at http://co.laplata.co.us to learn more about the laws and services.
Craig Larson is the La Plata County assessor. Reach him at 382-6221 or at http://www.co.laplata.co.us.