Colorado homeowners recently began receiving eye-popping notices in the mail from their county assessors with updated property valuations and new corresponding tax estimates.
The median increase in home values across the state was 40% since June 2020, the last time assessors determined property values.
Home values are one of three factors that determine property tax bills in Colorado, along with the statewide assessment rate, which is set by the legislature, and the local mill levy rate, which is set usually with voter approval, by school districts, fire districts and other local governments.
But the new property tax estimates homeowners received are almost certainly higher than what Coloradans will actually pay.
That’s because Gov. Jared Polis and Democrats in the legislature this week introduced a 10-year plan to limit the property tax spike in Colorado. Senate Bill 303 passed the legislature on May 8, placing Proposition HH on the November ballot, it could reduce residential and commercial property assessment rates while exempting a portion of properties’ value from taxation.
The relief would begin in the current 2023 tax year, for which payment is due in 2024, and run through the 2032 tax year, for which payment is due in 2033.
The Colorado Sun put together a calculator to help property owners determine what their tax bills might look like with and without Proposition HH.
How are property taxes calculated
Property taxes in Colorado are calculated by multiplying the statewide assessment rate by the value of a home — sometimes referred to as a market value — as determined by a county assessor. That number is then multiplied by the local mill levy rate.
(A mill is a $1 payment on every $1,000 of assessed value. So in order to figure out what your tax bill is you should multiply your mill levy rate by 0.001 and then multiply that number by the product of multiplying your home’s value by the statewide assessment rate. That’s how much you owe.)
So someone who owns a home valued at $600,000 and assessed at a 6.765% statewide residential assessment rate in a place where the mill levy rate is 75 would owe $3,044.25 in taxes each year. The formula to get to that number looks like this: $600,000 x 0.06765 x (75 x 0.001) = $3,044.25.
To find your local mill levy rate, search your address on your county assessor’s website. The rate varies from address to address, but using a rate of 75 would give you a solid estimate of what your bill would be.
There can be other factors that come into play when it comes to calculating your property taxes — such as whether you claim the senior homestead property tax exemption or if a portion of your home’s value is exempt from taxation — but the formula above is generally how your bill is determined.
The bottom line is that property taxes are complicated, and your best resource is always your county assessor’s office.
Keep in mind: If the value of a home, as determined by a county assessor, goes up, so does the owner’s tax bill — even if the tax rate isn’t going up. In Colorado, the Taxpayer’s Bill of Rights, a 1992 constitutional amendment approved by voters, dictates that tax rates can only be increased by a vote of the people.
How Proposition HH would change residential property tax bills
Here’s how the rates would change under Proposition HH:
- The residential assessment rate would be reduced to 6.7% from 6.765% in 2023, for taxes owed in 2024, and to 6.7% from 6.976% for taxes owed in 2025. The 6.7% rate would remain unchanged through the 2032 tax year, for taxes owed in 2033.
- In addition to the assessment rate cuts, residential property owners would get to exempt the first $50,000 in their home’s value from taxation for the 2023 tax year, and then $40,000 in the 2024 tax year. The break would persist until the 2032 tax year, except for people who own second and subsequent single-family homes, like rental or vacation properties, which would stop being subject to that benefit in the 2025 tax year.
UPDATED AT 3:45 P.M. ON MAY 9: This section of the story was updated to reflect an amendment to the bill. The calculators below were updated as well.
UPDATED AT 7:30 P.M. ON MAY 3: This section of the story was updated to reflect an amendment to the bill. The calculators below were updated as well.
Calculate how much Proposition HH would save you
We created the calculators below to help Colorado property owners estimate how Proposition HH could lower their tax obligation if it passes.
Some important things to keep in mind:
- This will not be accurate if you claim a senior homestead property tax exemption.
- To determine your local mill levy rate, you should go to your county assessor’s website and search your address. The rate may change if voters where you live vote to increase the mill levy rate in the November election.
- Don’t confuse the statewide assessment rate with your local mill levy rate. They are two separate and very different things.
- If your home’s value is less than $40,000, these calculators will not work for you. That’s because of the provision in Proposition HH exempting the first $50,000 or $40,000 of home’s value from taxation, which doesn’t fully apply to homes worth less than that amount. In such cases, Proposition HH would reduce your home’s taxable value to a minimum of $1,000.
- If you own a multifamily residential property, these calculators will show what your tax bill would be under Proposition HH but it may not accurately capture the amount of money the initiative would save you.
- Proposition HH would let some local government entities that collect property taxes choose to cap their annual increase in property tax revenue to the rate of inflation. School districts, which account for a large portion of Colorado property taxes, would not be among those entities. The calculators below do not account for that option, so they may estimate a larger property tax bill than you would owe under the measure.
OK, now that you’ve read those disclaimers you’re ready to use the calculators:
What your residential property taxes would be through the 2032 tax year under Proposition HH:
Under the plan, taxes would go up slightly for people’s second and subsequent single-family homes in Colorado starting in the 2025 tax year. (The change doesn’t apply for second or subsequent multi-family residential properties.)
What your residential property taxes would be in tax years 2025 through 2032 for your second or subsequent Colorado single-family home under Proposition HH:
As we said above, property taxes are complicated, and your best resource is always your county assessor’s office. If you have questions about our calculators, send an email to questions@coloradosun.com and we will do our best to respond.
And remember that commercial property taxes are calculated differently than residential taxes.
Also note: Proposition HH would affect property tax bills through the 2032 tax year, but it’s impossible to determine by how much because home values will be reassessed again in 2025. That will change how much each property owner will have to pay.
If you want to play around with the numbers further, use the property tax calculator below to insert different statewide assessment rates, mill levy rates and property value amounts that are exempt from taxation.
This is a good tool to calculate the tax bill for a commercial property or for a residential property if you claim the senior homestead property tax exemption:
What else you should know about Proposition HH
Proposition HH will be on the November ballot — and it may not be the only property tax measure that goes before voters in the 2023 statewide election.
While Proposition HH would reduce property tax bills, it would also lower the size of potential refunds owed to Colorado taxpayers under the Taxpayer’s Bill of Rights, which caps government growth each year based on growth in population and inflation.
The measure would increase the cap by another 1% and send the extra tax revenue to schools and local governments to make up for a portion of the money they would have received from property taxes had the measure not passed.
The following charts show estimates of how much smaller Coloradans’ TABOR refund checks would be over the next two tax years should Proposition HH (also known as Senate Bill 303) pass and should it fail.
On Saturday, the legislature introduced House Bill 1311, which would change the TABOR refund system for one year — pending the approval of Proposition HH.
Instead of refund checks tied to income levels, in which higher earners get larger refunds, House Bill 1311 would make it so every taxpayer’s refund check is a flat amount: about $650 for single filers and $1,300 for joint filers.
For wealthy Coloradans, the passage of Proposition HH and House Bill 1311 would effectively erase any property tax relief they would have received for the 2023 tax year.
UPDATE: This story was updated at 3 :45 p.m. on Tuesday, May 9, 2023, to reflect and to reflect that the bill passed.
UPDATE: This story was updated at 3 p.m. on Saturday, May 6, 2023, to reflect how the introduction of House Bill 1311 would affect Coloradans’ TABOR refunds.
UPDATE: This story was updated at 8:10 p.m. on Wednesday, May 3, 2023, to reflect amendments to Senate Bill 303 and to add context about how the measure would let some local government entities that collect property tax revenue choose to cap that revenue each year at the rate of inflation.