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Assessor

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1. Will property valuations for tax assessments be changing in Delta County in 2010?

Generally, no. Tax year 2009 was a general re-appraisal year in Colorado. All taxable properties were re-valued in Delta County in Tax Year 2009. Tax Year 2010 is an “intervening” year in Colorado’s statutory 2-year reappraisal cycle. Generally, a property value will only change in Tax Year 2010 if the physical characteristics of the property have changed, or if the property’s use or classification for assessment purposes has changed. In those cases, the Assessor’s office will send a Notices of Valuation in May, 2009 that will reflect the valuation change. Otherwise, the insert you receive in your Tax Year 2009 Tax Notice (mailed in January, 2010) serves as your Tax Year 2010 Notice of Valuation, with the actual value of your property stated on the Tax Notice itself. Using this method to notify taxpayers of their valuation in an intervening year saves several thousand dollars in mailing costs. The taxpayer has a right to challenge the Tax Year 2010 valuation until June 1, 2010, if he or she believes the valuation of his or her property is incorrect. Under Colorado law, properties will be reappraised to a new level of value for Tax Year 2011.

2. Are there any property tax relief/rebate programs available to Delta County taxpayers?

Yes, the following Colorado programs are available:
Senior Property Exemption. Information on eligibility requirements and application information can be found here:
http://www.dola.state.co.us/dpt/publications/docs/brochures/08SeniorEx.pdf

Application forms:
Short form - http://www.dola.state.co.us/dpt/forms/docs/SHORTFORM080707.pdf
Long form – Instructions: http://www.dola.state.co.us/dpt/forms/docs/LONGFORM080707.pdf
Form - http://www.dola.state.co.us/dpt/forms/docs/LONGFORM080707-B.pdf

Please contact the Delta County Assessor’s office if you have questions about which form to use.

NOTE: Funding for this program is made available at the discretion of the Colorado Legislature. Qualifying homeowners are encouraged to apply for the Exemption; however, there is no guarantee that the exemption will be either partially or wholly funded for Tax Year 2010.

Property Tax Exemption for Disabled Veterans:
http://www.dola.state.co.us/dpt/publications/docs/brochures/08Disabled%20VetExBrochure.pdf

Colorado Property Tax/Heat/Rent Rebate Program:
http://www.colorado.gov/cs/Satellite/Revenue/REVX/1216116072809

Colorado Property Tax Deferral Program
http://www.colorado.gov/cs/Satellite/Treasury/TR/1190277266190

3. I have read that property values are declining significantly all across the United States? Will this affect the valuation of my property in Delta County?

Not for tax year 2010—for two reasons. First, under Colorado law, the sales data collection period for 2009 and 2010 tax years ended on June 30, 2008 (Colorado requires re-appraisal of all taxable real property to a new level of value every two years—2009 was a “general re-appraisal year.”; 2010 is an “intervening” year.) While sales volume had declined during this data collection period compared with the period two years earlier, most sales prices had not declined, and—in fact—many had increased. As a result, it is likely that many Delta County taxpayers saw an increase in their property valuation for tax year 2009, and those values will carry over to Tax Year 2010, subject to the exceptions noted in the first question in the FAQ sheet. Second, so far, Delta County property values have generally tended to lag the declines seen in much of the rest of the country. The data collection period for valuations for tax years 2011 and 2012 starts January 1, 2009 and ends June 30, 2010—what the Tax Year 2011 valuations will look like will depend on how the Delta County real estate market behaves during the 18 months that began on January 1, 2009. Please note that these dates are not determined by the assessor, but are set by Colorado statute. Colorado law (and two published Colorado Court Cases) prohibits the Assessor from considering any sales that occurred after June 30, 2008 for purposes of tax year 2009 and 2010 valuations.

4. I don’t understand why there should be a property tax at all. It seems like a very unfair tax. Why does it continue to be used?

All taxes may be perceived as “unfair” by some individuals or groups. Each type of tax (sales, income, or property) has advantages and disadvantages—for either the taxpayer or for the government agencies that rely on tax revenue to provide services. One of the features of the property tax that makes it attractive for those reliant on tax revenues is that the property tax is a relatively stable source of revenue, regardless of short-term fluctuations in the economy. Many of the government entities that rely on property tax provide services that also are necessary regardless of economic conditions. Examples of these are schools, county government (road maintenance, law enforcement, etc.), cities and towns (law enforcement, water, sewage treatment, etc.), water districts, cemetery districts, hospital and ambulance districts, and fire protection districts. Thus, the property tax provides a relatively stable source of revenue to agencies whose services continue to be in demand regardless of economic conditions. The property tax is also one of the most cost-efficient taxes to administer and collect. As an example, the 2008 property taxes levied for all Delta County taxing entities was $17,704,694. The total budget for the Assessor’s and Treasurer’s office to administer and collect property taxes during 2008 was only approximately 6% of that total (that “overhead” expense includes the costs for listing, classifying and valuing all taxable real and personal property in the county, and administering, billing, and collecting the taxes, then distributing the revenues to the several dozen different taxing entities that rely on those taxes for revenue).

5. The Colorado property tax seems especially inequitable and unfair—especially to commercial property owners. Why is this?

The biggest inequity in the Colorado property tax system is that only 7.96% of the market (“actual”) value of residential property is taxable, while 29% of all other property (including commercial and industrial property) is taxable. This inequity is mandated by a formula approved by the Colorado voters and placed into the Colorado Constitution. That formula can only be changed by a vote of the Colorado citizenry. Despite this constitutional inequity, the actual appraisal methods used by Colorado assessors to establish property values are one of the most accurate and fair systems in use by any state. Residential property taxpayers in Colorado pay one of the lowest effective tax rates per dollar of market value of anyplace in the United States—generally ranking from 46th to 50th lowest in the U.S.

6. Can you estimate my taxes based on the value of my property?

The formula for computing taxes is as follows: Actual Value X Assessment Ratio = Assessed Value. Assessed Value X Mill Levy = Taxes. The Assessor’s responsibility is to determine the actual value and classification of real and personal property. Generally, the Assessment Ratio for real and personal property in Colorado is 29%, except for improved residential property. The residential assessment ratio must be adjusted every two years by the State Legislature to conform with the 1982 “Gallagher” Amendment to the Colorado Constitution. Under the Gallagher Amendment, that ratio is subject review and possible change by the State Legislature to comply with the formula contained within the Amendment at every two-year re-appraisal cycle. For tax years 2007 and 2008, this ratio was 7.96%, and will remain at 7.96% for tax years 2009 and 2010. The various mill levies are set each December by the various taxing entities. The 1992 “TABOR” Amendment to the Colorado Constitution generally requires a vote to be taken in the appropriate taxing district in order to raise a mill levy. Provisions of the TABOR Amendment regulate the increase in the revenue a taxing entity may be allowed, which can result in lowering of levies under some circumstances. The Assessor has no control of either the setting of the assessment ratio or mill levies.

7. Who makes the rules on property assessment?

Property tax law is formulated like any other state law. Some provisions are enacted by Constitutional Amendment, some by legislation. The Colorado Division of Property Taxation, under the direction of the Property Tax Administrator hired by the Colorado State Board of Equalization (SBOE) formulates policies to administer the property tax laws. The SBOE also has oversight of County Assessors to assure compliance with assessment guidelines. Colorado is one the few states that also utilizes an independently conducted statistical and procedural audit of the assessor’s office to assure compliance with assessment guidelines, state regulations, and state laws. Several years worth of the auditor’s final annual audit report for the Delta County Assessor’s office may be accessed at the Delta County website.

8. News media stories have indicated that nearly all taxpayers who contest their assessment get a substantial reduction in value that significantly reduces their tax. Is that true?

Not usually. In many cases, there is no basis for a value adjustment. Many of the value changes which are made during appeal period reflect minor corrections in property inventories, which generally do not cause major value changes. As for taxes, an example of a $1,000 reduction in actual value of an improved residential property would reduce a tax bill by around $6.00 to $8.00 depending on the mill levy.

9. I think you have the correct value on my property, but I feel my taxes are too high. What can you do about that?

The Assessor does not control the setting of mill levies. Taxpayers should consider attending budget hearings of taxing entities prior to the setting of mill levies. Furthermore, nearly all of the regulations and procedures the Assessor must follow are mandated by Constitutional Amendment, Statute, or State Regulation. Taxpayers should contact their Legislators in regard to matters of property taxation policy. The Assessor does not formulate tax policy.

10. I thought the “Taxpayer Bill of Rights (TABOR) Amendment” said that taxes could not go up, yet my valuation has increased. How can that be?

The TABOR Amendment restricts the total amount of revenue growth and individual taxing entity (a cemetery district, for example) is allowed each year. This is computed by each entity utilizing a formula that takes into account inflation, new construction in the taxing entity’s boundaries, and other factors. The Amendment does not restrict the amount that an individual’s taxes may change, nor does it place a specific percentage limitation on any individual’s tax change. The Amendment does state that mill levies can not be raised by a taxing entity without an election, except for very special circumstances. It also specifies that improved residential property must be valued using the market approach to value only.

11. I built my house myself. It cost me much less than the value you have assigned to it. Can’t you take my cost into account when you value it?

No. The 1992 “TABOR” Amendment to the Colorado Constitution mandates that the Assessor may only utilize the market approach to value residential property. Cost or income information can not be considered.

12. The farmer/rancher next door to me has a much lower value on his land than I do on my residential lot. Why?

By Colorado Constitutional provision, agricultural land is valued upon its ability to produce income, using a formula specified by the state, not upon its market value. There are specific requirements that must be met for property to qualify for agricultural designation. Agricultural residences are valued at their market value, just as regular residences are.

13. My business real estate has about the same actual value as my residence, but the tax for the commercial property was more than 3½ times my residential tax last year. Why?

Assuming the mill levies are the same, it’s because of the assessment ratio. As discussed above, the assessment ratio for improved residential property will remain at 7.96% for 2010. Under the Colorado Constitution and Statutes, commercial property has been and will be assessed at 29% of actual value. In other words, for tax year 2010, the portion of a commercial property’s value that is taxable is estimated to remain over three times the portion of an improved residential property’s value that is taxable. This inequity is part of the Colorado Constitution and can only be changed by a vote of the people.

14. What do my property taxes pay for?

Property taxes pay for all or part of a multitude of local services, from a town cemetery district to county government. By far the largest percentage goes to support the local schools, though. The Assessor’s office has a summary of Assessment and Levies available at the office or on-line (several years of Summaries are available on-line for information or comparison) which shows where property tax dollars go.

15. What records contained in the Assessor’s office are public?

Generally speaking, assessment records of all types held by the Assessor’s office are deemed public, unless Colorado Statute specifically requires them to be private. Some examples of records for which there is not public access permitted are personal property account records, Real Property and Manufactured Home Transfer Declarations, and individual Senior and Veterans Property Tax Exemption data. Also, names of certain judicial and law enforcement personnel contained within the assessment records can not be displayed on assessment records available on the county website. Some proprietary income and other information supplied to the Assessor in pertinent to the owner’s property may be considered confidential; however, generally speaking, information supplied to the Assessor in conjunction with an appeal of valuation becomes public record.

16. How does the Assessor’s Office determine what the selling prices were for real property?

From the actual recorded deeds and Real Property Transfer Declarations filed with the County Clerk & Recorder’s office. Colorado is a “public disclosure” state for real property records. When a deed is recorded transferring title to real property for consideration (money, etc.), the sales price of the real property must be disclosed to the County Clerk & Recorder and the County Clerk shall impose a documentary fee based upon that sales price (§39-13-102, C.R.S.). It is a crime to purposely misstate the sales price to the County Clerk & Recorder, punishable by a fine and/or jail time upon conviction (§ 39-13-106, C.R.S.). From the documentary fee, the Assessor can readily compute the property’s sales price, as well as by reviewing the Real Property Transfer Declaration. Real property sales prices are a public record and must be publicly available on the Assessor’s records; the Real Property Transfer Declaration, however, is NOT a public document.