In response to this year’s large jump in property values, officials have taken an action that likely hasn’t been seen in recent Douglas County history, according to the county’s head of property valuation.
“We as a county are motivated to give our citizens relief wherever it’s lawful and prudent,” said Toby Damisch, the county assessor, speaking about a move to lower the increase in property values.
Local taxes are in the spotlight after homeowners around the Denver metro area checked a notice from their county assessors this spring and saw that their home value had jumped by sometimes shocking amounts.
Driven by a costly real-estate market, those home values — as calculated for tax purposes — have spiked since the last time homeowners received notices of value two years ago. In Douglas County, residential properties faced increases between 30% and 60%, with a median of 47%.
The high increase in property values means families’ property tax bills could jump up next year.
That’s because when property values rise, the amount of taxes people owe goes up — even if local governments’ tax rates themselves don’t change.
After many homeowners in Douglas County filed challenges, or appeals, to blunt the increase on their home values, the median increase went down slightly.
Now, that number will come down even more — for a combined total of around a few percentage points — in a move that affects homeowners across the county, not just those who filed appeals.
“We also appreciate the fact that there are people who view this as practically an insult because it’s so modest compared to the increase,” Damisch said, adding: “But it doesn’t mean we shouldn’t take the action.”
The move, approved by the Douglas County commissioners Sept. 19, will provide an average of $223 in estimated property tax relief for owners of single-family homes, townhomes or condominiums, or a 4% adjustment.
“We understand this is a small step — this is one of a series of small steps,” said Damisch, who emphasized the county leaders are encouraging smaller local government entities to provide further relief.
Here’s a look at how the action works, how the 4% lowering was determined and where it applies.
Some homeowners may wonder why their property values jumped so high this year. The property valuation that homeowners received around early May is based on data as of June 2022, near the recent peak in the real-estate market.
So even though home prices have declined since then, property values from the county assessor’s office reflect last year’s exceptional highs.
Property taxes partly fund county governments, but they also fund school districts, fire and library districts, and other local entities.
Though Damisch’s office is bound by Colorado law, he and other officials researched a way to provide some property tax relief that would still fall within the bounds of legality.
The action went through what’s called the Douglas County Board of Equalization. In Douglas County, the county’s elected leaders, or commissioners, serve as the board of equalization. They voted 3-0 to approve the action.
They used a state law — Colorado statute 39-8-102 — to make the reduction around the county, a rare move according to Damisch, a 25-year veteran of the assessor’s office.
“I would say in that time frame, I can say with confidence that the (board of equalization) has held its hearings and made decisions because of its hearings and from time to time received small recommendations from the assessor, but nothing like this in recent history has occurred,” Damisch said.
Often, county officials have gone to the equalization board and said they found an error at a specific address that needed correcting, but this broad action is rare, according to Damisch.
Why not more?
So why only a 4% adjustment?
Damisch’s office recently received a review from a state-hired auditor that showed that his office’s calculations of property values were “straight down the middle” in terms of compliance with audit parameters and state statute, Damisch said.
“There’s a really important statute in Colorado law which says when an assessor performs a (revaluation), they must be within 5% of market value,” Damisch said.
Because the calculated property values this year in Douglas County started out essentially on the nose — and then saw a small drop overall due to the impact of homeowners’ filed appeals — a 4% change around the county was as large as Damisch felt he could propose while staying within the 5% boundary, he said.
“As much as we as a county would really wanted to do more than 4%, a lot more than 4%, to benefit our citizens and mitigate the results of this reassessment, we had to remain compliant with state statute, regulation, audit parameters,” Damisch said.
(Among Douglas County homeowners who filed a successful appeal on their property value in recent months, the average adjustment to the increase in value they saw as a result of the appeal for a single-family home was $340 less in estimated taxes, given current conditions, Damisch said. That’s in addition to the average of $223 in estimated tax relief around the county.)
Apartments not part of relief
Apartments, duplexes, triplexes and fourplexes, or “multifamily” properties, aren’t part of the county’s Sept. 19 property tax relief action. Neither are other types of property, like commercial buildings.
So renters in those types of units won’t see a change based on the county’s action. “Multifamily is 100% rental properties,” Damisch noted.
Those properties were excluded because their values increased at a “significantly more modest rate than single-family residential,” seeing average value changes that were generally similar to what the county saw in recent property revaluations, Damisch said.
Multifamily properties saw increases of somewhere around 20% this year, Damisch estimated.
He wasn’t sure how much the resulting rise in tax bills could translate into some shift in monthly apartment rent prices.
“Frankly, I think you would have to ask an apartment owner whether they would pass those increases on to their tenants or not,” Damisch said.
Owners of houses, townhomes or condos will see the 4% adjustment, including for homes of those kinds where renters currently live, Damisch said.
Vacant land in a residential neighborhood would not get the reduction, he added.
Other appeals continue
The action by the commissioners, acting as the board of equalization, is separate from the equalization board’s normal work, which includes making decisions on property value appeals that homeowners push past the assessor’s office level and contest further.
Regardless of the equalization board’s eventual decisions on those continuing appeals, those homeowners will receive the relief from the Sept. 19 decision as well, Damisch said.
The equalization board is no longer accepting appeals, as the deadline has passed. See more information about the appeal process at cdola.colorado.gov/appeal-of-your-valuation-reminder.