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.