Its Property tax time in Colorado: 5 tips to reduce your property taxes

Are you paying too much in property taxes

Are you paying too much in property taxes?

Want to save money on your property taxes?

    Are you paying more than you should on property taxes?  Colorado is different than many other states, properties are revalued every odd year based on 18 months prior data.  What does this mean?  Basically the value of your property is based on comparables prior to June 1 of 2012.  I’ve seen hundreds of properties substantially overvalued where the owners are paying thousands more than they should in taxes.  I recently inspected a commercial property that was valued at 650,000, based on my analysis, the property was worth no more than 350,000 (this equates to almost $6,000 more in taxes the owner is paying a year) Although 2014 is not a reappraisal year, you still can contest your taxes to possibly save yourself substantial money.

5 tips to help you contest your taxes in Colorado and win your property appeal?

  1. Dates are important, by statute you have from 5/1 to 6/1.  If you miss these dates you are out of luck.  Most counties allow you to appeal online and the process is pretty easy (just google your county + assessor)
  2. Follow the rules: remember for this year the only comparables that can be used are prior to 6/30/12 (typically a two year period), statute says that you cannot go back more than 5 years unless there are extenuating circumstances
  3. On residential, it is a numbers game: How residential appraisals work is the county calculates a neighborhood average and finds sales in close proximity to your house with similar characteristics.  The averages can lie.  For example in my neighborhood when I appealed in  13, there were a number of lower sales (also some higher one), I was able to make the case that I felt my house was closer to the lower sales (remember you are not talking about market value, nor does this influence the sale price of your home, etc…).  I was successful in my appeal and got my property value reduced over 30%
  4. On Commercial, use both methods:   On a commercial property both the sales and income approach are used.  If you had a tenant during this time period, the income approach (take net operating income divided by the applicable capitalization rate—the income approach on a commercial property is a separate article I’ll post at a later date) is a very good method to start with.  The sales approach is the second method that can be utilized.  Commercial is a bit more in depth than the residential appeal since commercial properties are considerably less uniform that residential properties.
  5. Use various tools to get your facts straight:  To win an appeal, the appeal has to be fact based.  Saying you “feel your property is overvalued” is a waste of time.  Make sure you have your facts straight (at a minimum 3 applicable sales for residential; for commercial, address both the income and sales approach).  You can get sales comparables from the county websites for a specific neighborhood (do not use Zillow or trulia, the square footages can be inaccurate, make sure you use the county data to ensure you compare above grade square footage).  For a commercial property use a tool like www.loopnet.com to see what asking rents are ,  get sales comps, etc… loopnet has many pictures and details on various commercial properties so you can compare apples to apples.

If you follow the five tips above your probability of winning your property appeal and saving yourself thousands of dollars will be greatly increased.

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