Colorado Property Taxes Explained

In Colorado there are two factors in calculating property taxes:

1. The assessment rate is set by the state and is currently 7.15% for residential property and 29% for commercial and vacant land. Exciting changes to these rates are coming for the 2022 tax year (taxes paid in 2023)!

2. The mill levy is the sum of the tax rates levied by local taxing authorities (county, town, school district, water district, fire district, etc). Mill rates are set at the end of each tax year and are determined based on the amount of money each taxing authority will need to provide necessary services the following year. Mill rates can be changed with voter approval.

How do those two factors affect my taxes?

To calculate property taxes, a home's actual value is multiplied by the state residential assessment rate of 7.15% to get the assessed value. The assessed value is then multiplied by the local mill levy to reach the amount of taxes due. Let's do math to demonstrate! For this example I'm using my local mill levy which is for tax area 3, Breckenridge proper. $1,000,000 actual value X 0.0715 state assessment rate = $71,500 assessed value $71,500 assessed value X 0.057105 local mill levy for tax year = $4,083 taxes due -or- Multiply the two factors and convert the product to a percentage to get the Effective Tax Rate. Then apply that to the actual value of the home: 0.0715 assessment X 0.057105 mills = 0.00408301 X 100 = 0.408% Effective Tax $1,000,000 actual value X 0.408% Effective Tax Rate = $4,080 taxes due

What's all this actual and assessed value jargon?

Actual value is essentially the market value of the home as of the June 30th Appraisal Date.

Taxable value is the amount that is taxable. This mainly applies if there is a Senior Exemption on the home or if it is partially completed new construction. The actual value is discounted for these items (if applicable) to arrive at the taxable value.

Assessed value is the actual or taxable value multiplied by the applicable assessment rate as required by state law. This rate is currently set for 2021 taxes at 7.15% for residential properties and 29% for commercial and vacant land.

How does the Assessor's Office figure the actual value of my property?

Colorado law requires Assessor's Offices to revalue all property in their county every other year, in the odd-numbered years. It also requires residential properties to be valued using market sales within a 2-5 year time frame. This time frame always ends on June 30 of the even-numbered year prior to the reappraisal and is known as the Appraisal Date.

Clear as mud? For example, the Appraisal Date for the 2021 reappraisal (taxes payable in 2022) is June 30, 2020. The time frame of sales analyzed is July 1, 2015 to June 30, 2020.

FUN FACTS:

• 68.645 is the average mill levy for tax year 2021 in Summit County

• 66.878 was the average mill levy for tax year 2020 in Summit County

• Mill is derived from the Latin word millesimum meaning thousandth, which is why the decimal is moved 3 places to the left.

• Colorado is ranked as having the 3rd lowest residential property tax rate in the country. Hawaii has the lowest.

Want to learn more about the mill levy for your tax area?

Check out the 2021 Property Tax Table to see each tax area's mill levy in Summit County and the corresponding effective tax rate.

2021TaxAreaTable_EffectiveTaxRate.pdf

Download PDF • 127KB