The 2017 Reappraisal: Most Property Values Increase
by Brad Hughes MAI, Montrose County Assessor
Under Colorado law, county assessors’ offices throughout the state conduct a complete revaluation of all properties in their county every two years. The Colorado Legislature sets the appraisal date, the market sales data collection period, and the annual calendar for the assessment process.
The previous revaluation was completed in 2015 and was based on a June 30, 2014 level of value. These valuations were established using market sales data from January 1, 2013 through June 30, 2014 and were used for tax years 2015 and 2016 (payable in 2016 and 2017 respectively). As a result of the assessment calendar, property tax assessment valuations will always lag behind current market conditions. The current revaluations are based on a June 30, 2016 level of value. The new values have been established using market sales data from January 1, 2015 through June 30, 2016 and will be used for tax years 2017 and 2018 (payable in 2018 and 2019 respectively). Sales transactions occurring after June 30, 2016 cannot be considered until the 2019 reappraisal.
Real property classes changed as follows: vacant land experienced an average increase of about 8.5%. This increase in vacant land assessments was primarily due to a strengthening demand for new single-family home sites. Residential improved properties increased on average about 15%. This substantial upward trend in the residential market was consistent for most of Montrose County. However, residential home values in the west end of the County declined on average by about 12%. Commercial property values displayed a wide-range of dispersion. Commercial value changes varied depending primarily on location and property type. Most commercial properties experienced value changes between a 5% increase and a 2% decrease. Stabilized rental rates, moderate vacancy, and decreasing capitalization rates assisted in maintaining an overall increase of about 3% for all commercial property. Agricultural land experienced the largest increase in value of all property classes. Agricultural land is valued based on the earning capacity of the land; the calculation uses a ten-year statewide average of commodity prices. For this re-assessment cycle, two historic “low years” of commodity prices were removed and two more recent “higher” priced commodity years were added. This factor along with stabilized operating expenses resulted in a significant increase of about 27% for irrigated land within Montrose County. Most agricultural grazing land increased by about 9%. This trend of double-digit increases in irrigated land and single-digit increases in non-irrigated land was experienced not only in Montrose County, but across the entire western slope of Colorado.
The following is a general review of property assessment and taxes. 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 = Taxes)
The Assessor’s office is solely responsible for establishing valuations, not taxes. To accomplish this, the assessor uses actual market sales transactions to build a mass appraisal valuation model that is then used to set the values on all properties within the county. Assessment rates are dictated by the Colorado Constitution and State Law for all 64 Colorado Counties. Currently, the assessment rate is 7.96% for residential properties, and 29% for most all other property types. However, House Bill 17-1349 is currently in the Legislature awaiting approval. If this bill is passed, it will reduce the current residential assessment rate to 7.2%. If approved, this change will off-set a portion of the residential tax burden created by the increasing home values. Preliminary indications project that a 15% residential increase in actual value will translate to only about a 4% increase in assessed value. The last component used to calculate taxes is the mill levy. Mill levies are established by the 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 the taxes due. The County Treasurer’s office collects and distributes these taxes for the various taxing jurisdictions.
Ultimately, the assessor’s goal is to equalize property values and ensure that the tax burden is distributed fairly and equitably among property owners within the statutory and constitutional guidelines of the State of Colorado.
After receiving your new Notice of Valuation in early May 2017, please review your change in value. If you disagree with the new valuation, there are detailed procedures on the back of the notice explaining how to appeal your valuation. If you would like to review your property characteristics, view sold properties, or research property records please go to our online public records search program at http://eagleweb.montrosecounty.net/eagleassessor/web.
If you have any additional questions, concerns, or comments please call the Montrose County Assessor’s Office at (970) 249-3753 or email us at email@example.com.