The 2019 Reappraisal: Significant Value Increases for Most Properties
by Brad Hughes MAI, Montrose County Assessor
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 2017 and was based on a June 30, 2016 level of value. These valuations were established using market sales data from January 1, 2015 through June 30, 2016 and were used for tax years 2017 and 2018 (payable in 2018 and 2019 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, 2018 level of value. The new values have been established using market sales data from January 1, 2017 through June 30, 2018 and will be used for tax years 2019 and 2020 (payable in 2020 and 2021 respectively). Sales transactions occurring after June 30, 2018 cannot be considered until the 2021 reappraisal.
Real property classes changed as follows: vacant land experienced an overall average valuation increase of about 20%. While vacant land increases within the Montrose city limits were closer to 25%. These increases in vacant land valuations were primarily due to strengthening demand for new single-family home sites. Most residential improved properties, including single-family residences, condominiums, and multi-family housing increased between 15% and 30%. This substantial upward trend in the residential market occurred throughout most of the County, with the one exception being the Nucla/Naturita area, which experienced only a very moderate increase in residential valuations. Commercial and industrial properties also had strong valuation increases, but varied depending primarily on location, property type, and the age of the property. Most commercial properties experienced valuation escalations between 10% and 25%. This strong demand for commercial/industrial properties was evident based on an abnormally high volume of commercial sales transactions during the data collection period. The only class of property that experienced a decrease in value was irrigated farmland. Agricultural land is valued based on the earning capacity of the land; it is not valued at a market value. The agricultural land calculation uses a ten-year statewide average of commodity prices. For this re-assessment cycle, two historic “high years” of commodity prices were removed and two more recent “lower” priced commodity years were added. This factor along with increased operating expenses and lower production yields resulted in a significant reduction of about -25% for irrigated farmland within Montrose County. In conclusion, these substantial increases in property values within Montrose County followed a similar trend to what occurred within most of Western 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.
(Market Value x Assessment Rate = Assessed Value x Mill levy = Taxes)
The Assessor’s office is solely responsible for establishing valuations, not taxes. To accomplish this, the assessor uses actual market sales transactions to build a mass appraisal valuation model that is then used to set the values on all properties within the county. Assessment rates are dictated by the Colorado Constitution and State Law for all 64 Colorado Counties. Currently, the assessment rate is 7.20% for residential properties, and 29% for most all other property types. However, Senate Bill 19-255 is currently in the Legislature awaiting approval. If this bill is passed, it will reduce the current residential assessment rate to 7.15%. The last component used to calculate taxes is the mill levy. Mill levies are established by the county commissioners, school districts, and the boards of the various taxing entities (fire, recreation, library, sanitation, cemetery, etc...). A summation of these various individual levies is applied to the assessed value to determine the taxes due. The County Treasurer’s office collects and distributes these taxes for the various taxing jurisdictions.
Ultimately, the assessor’s goal is to equalize property values and ensure that the tax burden is distributed fairly and equitably among property owners within the statutory and constitutional guidelines of the State of Colorado.
After receiving your new Notice of Valuation in early May 2019, please review your change in value. If you disagree with the new valuation, there are detailed procedures on the back of the notice explaining how to appeal your valuation. If you would like to review your property characteristics, view sold properties, or research property records please go to our online public records search program at http://eagleweb.montrosecounty.net/eagleassessor/web.
If you have any additional questions, concerns, or comments please call the Montrose County Assessor’s Office at (970) 249-3753 or email us at firstname.lastname@example.org .