In June of 2022 the median sales price for a home in Delta County was $417,000. This was the highest median monthly price statistic in the history of Delta County. Coincidentally and rather unfortunately June 2022 is the month arbitrarily chosen by the state of Colorado to base its property assessments to determine our property tax/ This happens every 2 years. The result is a ~ 45% increase in property value over the prior assessment period for Delta County. As if sky high inflation in goods and housing wasn’t enough of a pocket book pinch, we will all be hit by an upper cut punch of a rather elevated property tax bill next year. From time to time I hear the exclamation that Realtors are responsible for driving up property prices and helping to create situations such as this. Let me set the record straight; never once have I held a gun to a buyer’s head while they sign on the dotted line at the closing table! As well the majority of the sellers I represent suggest listing their property at a higher price than the market evaluation that I provide them. We Realtors are easy fall-guys though. I get it. No hard feelings!
Many will say we’ve got it easy in Colorado and honestly comparatively speaking we do when considering residential property tax. Currently we rank 49th in the nation for lowest residential property taxes. Colorado’s effective real estate tax of just .52% seems paltry compared to New Jersey where the median real estate tax is 2.46% resulting in a median $8900 bill for Garden State residents. Colorado’s commercial real estate tax however is quite high at 2.1%. By comparison the highest commercial property rate in the nation is Kansas with a 3.1% median tax rate. Regardless, in Colorado where nearly 50% of our income goes just to pay the mortgage, another cost of living increase in the form of more taxes is most unwelcome. The timing is just really bad.
In times like this we all tend to wonder, “Where is this tax money all going?!” Well believe it or not all the money stays in the county. In Delta county the lion’s share go to our schools followed by the county itself, then town governments, then emergency services, recreation, water districts, cemetery, and usually the smallest allocations go to our “roads and bridges”. Any state highways maintained by CDOT are funded through the state and federal gas tax which apparently has remained unchanged for the past 30 years! It should also be noted there are safeguards that prevent counties from retaining too much of this potential windfall. The notoriously controversial and complicated TABOR (Taxpayer Bill of Rights) Amendment limits revenue amounts county governments can retain and spend, and the Property Tax Revenue Limit restricts the amount of property tax revenue that may be collected each year. Many Colorado educators contend TABOR is directly responsible for the continuous downward slide in school funding but you wont see me trying to dissect this issue! I just like to kick the hornet’s nest and run away.
In an attempt at providing some relief for Colorado taxpayers the State of Colorado passed several pieces of legislation in 2023. These Property Tax Deferral Programs have traditionally helped seniors and active military personnel continue to afford to live in their homes by deferring the payment of their property taxes. But this year this service was expanded to provide relief to all homeowners affected by increased property taxes in 2020, 2021, and 2022. According to the new rules for qualification your property taxes must have grown by 4% over the last two years and you have to be able to defer $100 and the cap is $10,000. According to the State Treasurer tax payers can defer year after year after year if they qualify. 3 new bills address the concern most Coloradans are expressing after receiving estimated taxes for tax year 2023:
Senate Bill SB21-293-a bipartisan bill allowing any homeowner to defer property taxes that exceed the tax growth cap of four percent, with a minimum deferral of $100 and a maximum cumulative deferral of $10,000.
Senate Bill 22-220 -The act shifts the administrative responsibilities for the program from county treasurers to the State Treasurer.
House Bill 23-1284- For all three categories of taxpayers who are eligible to defer the payment of real property taxes, current law specifies that the property for which the deferral is claimed cannot be income-producing. Beginning in the 2023 property tax year, the bill specifies that the prohibition against the property being income-producing does not apply if the taxpayer claiming the deferral is at least 65 years old, is a person called into military service, or is the surviving spouse of such a taxpayer.
Applications for 2023 were open from January 1, 2023, to April 1, 2023. Claims must be filed after January and on or before April 1 of each year in which the taxpayer claims the deferral. Applicants must reapply each year to determine eligibility and continue using the program. Applications will open again on January 1, 2024. Homeowners can visit colorado.propertytaxdeferral.com to learn more about Colorado’s expanded Property Tax Deferral Program. You can also call the Treasurer’s Office with questions about enrolling or eligibility at 833-634-2513 or email at [email protected].
I’ll end this “property tax edition” of Keepin’ it Real Estate with a brief market report. Our market continues to be a bit spongy as of late. Our “listing season” of April-June is off to a slow start compared to the past 3 years. April saw just 50 new listings county wide compared to 70 last year and May so far is about 40 new listings. If the May pace keeps up and we get another 40 by the end of the month we will break even compared to May 2022. I honestly dont see this happening though. The median sold price remains choppy from month and if anything a possible small median increase county wide could be perceived compared to 2022. I anticipate this trend to continue at least through the end of 2023.
Western Slope rivers are running high and fast and have been super fun to boat if not a bit dangerous lately. Mild flooding is happening valley wide and it doesn’t even look like peak runoff has occurred yet. If this mild rainy weather holds up maybe the worst flooding is over? Local trails are bursting with spring vegetation and flowers like I haven’t seen in a long time. Irrigation has come on late in most locations because we didn’t need it! Even though its getting expensive and taxes are going up in our neck of the woods I honestly wouldnt want to be anywhere else! I hope you all can block some time to get outside into nature and enjoy this extraordinary spring weather and the beautiful state we call home.