Greetings, fellow property owners of La Plata County. You’ve likely heard the value of real estate in Colorado has seen a substantial increase over the past two years. It’s true, values have increased over all types of real property in La Plata County as well.
Property owners in most of western Colorado can expect tremendous valuation increases when they receive their 2023 Notice of Valuation soon after May 1. Over the past two years, a strong demand for real estate, increased building material costs, historically low mortgage rates and a steady migration from larger cities have all contributed to these historic valuation increases.
Under Colorado law, county assessor offices conduct a complete revaluation of all properties every two years. The previous valuations were based on a June 30, 2020, level of value. These valuations used market sales data from July 1, 2018, through June 30, 2020. The new 2023 valuations are based on a June 30, 2022, level of value and were established using market sales data from July 1, 2020, through June 30, 2022. New valuations will be used for tax years 2023 and 2024 (payable in 2024 and 2025, respectively).
Sales transactions after June 30, 2022, cannot be used or considered until the next reappraisal in 2025. When you receive your notice, the question is does this value on my property reflect the market value (or what it would sell for) as of June 30, 2022? The value increase does not mean property taxes will adjust the same amount. The state Legislature has been working on property tax relief over the past two years as well and has passed changes that will affect our property taxes.
In Colorado, three factors determine the level of taxes on a property: the market valuation, the assessment rate and the mill levy.
(Market Value x Assessment Rate = Assessed Value x Mill levy = Property Taxes)
The assessor’s office is solely responsible for establishing valuations, not taxes. With the 2020 repeal of the Gallagher Amendment, assessment rates are now determined by the Legislature for all 64 Colorado counties. In an attempt to off-set tremendous valuation increases, the Legislature has made reductions in statewide assessment rates for several property classes for tax year 2023, using House Bill 22-238. Those changes are highlighted in the accompanying box.
In addition to lowering assessment rates, the Colorado Legislature has also provided an actual value exemption of $15,000 per residential property and $30,000 per improved commercial property for tax year 2023. These actual valuation exemptions will not be reflected in the Notices of Valuation, but will be applied prior to the 2023 tax bills being sent.
The last component used to calculate taxes is the mill levy. Mill levies are established by county commissioners, school districts and the boards of the various taxing entities (fire, recreation, library, sanitation, cemetery, etc.). A summation of these various individual levies is applied to the assessed value to determine taxes due. At this time, it is undetermined what the 2023 mill levies will do since the taxing entities will not set 2023 mill levies until the fall during budget hearings.
The typical increase in property value in La Plata County is 20%. This will vary by location and property type. Locally, the more affordable the property, the steeper the market value increase.
These increases in value include commercial properties that were granted COVID-19 adjustments. Those adjustments are now gone and market values have increased.
If you have questions on the Notice of Value, please contact the assessor’s office. We are happy to discuss the value of your property. Taxes are yet to be determined and not something the assessor has control over.
Carrie Woodson La Plata County assessor.