What does the property tax relief bill do?


Colorado has two rates for (real estate) property tax, one for residential property and one for “non-residential,” which generally means commercial property.

Before SB23-303 was passed on May 8, non-residential property was scheduled to be taxed next year at 29% of its actual value. 

Residential property was set to be taxed at 6.765% of its actual value, rising to 6.98% in 2025, and 7.15% every year thereafter.

County assessors statewide determine actual values of property as of June 30 of even-numbered years. Coloradans receive notice of those determinations in April of the next year. 

That happened a few weeks ago. Property values statewide, but particularly in the front range, increased an average of 35% to 45% between June 30, 2020 and June 30, 2022, portending much higher taxes in 2024.

The (Democratic) leadership of the general assembly came up with a plan to lessen the impact of higher property values on tax bills beginning in 2024, through 2032. 

Non-residential property will be taxed at 27.85% of actual value in 2024, ratcheting down to 25.9% in 2031 and 2032 (instead of 29%).

Residential property actual values will be decreased $40,000 (except in 2023, when they will be decreased $50,000), then 6.70% (instead of 6.765% next year) of the remaining actual value will be taxed. That rate will stay in place through 2032. 

So as not to deprive local governments and fire districts of all the money they would have received from property taxes had the state not interceded, the plan increases, by approximately $167 million annually, what the state can keep that would have otherwise been subject to TABOR refunds. That money will go to local governments and fire districts if voters approve this entire plan, which will appear as Proposition HH on ballots this November.

Late in the legislative session, when it was pointed out that renters got no benefit from this plan because they don’t pay property taxes, legislative leaders came up with a companion law that will result in lower-income Coloradans getting larger TABOR refunds than they otherwise would have. The plan assumes renters, who are estimated to comprise 40% of the state’s population, are generally lower earners than property owners. That, too, is dependent on approval of Proposition HH by the voters in November.

This legislation also changed the way the senior citizen property tax exemption is applied. That benefit, which allows those 65 and over to reduce their property value by $100,000 before applying the tax rate of 6.7%, formerly required that senior citizens lived in their homes for ten years or more. The waiting period has been eliminated so that seniors can get the exemption on any primary residence, regardless of how long they’ve lived in it.  

Looking at how this plan will reduce residential property taxes, a home valued at $600,000 that was previously valued at $400,000, using a typical mill levy of 80 mills, will go from paying $2,224 this year (on the $400,000 valuation) to $2,948 next year (on the $600,000 valuation). Without this change in the law, the tax next year would have been $3,247.

If you’re lucky enough that your home increased in value from $1,000,000 to $1,400,000 during the past two years, you will go from paying $5,560 this year to $7,236 next year. Without this change in the law, your tax next year would have been $7,577.


Editor’s note: Yes, our reporter is also a C.P.A.