Apartment Appraisers & Consultants

Real Estate Taxes

Real estate taxes in Colorado are based upon the county assessor's estimate of market value, which is then multiplied by an assessment ratio and a mill levy. State tax laws favor residential properties (including apartments) over commercial properties by using a lower assessment ratio. While the commercial ratio is fixed at 29% of actual value, the residential ratio is adjusted every 2 years to prevent the statewide residential assessed value total from exceeding approximately 45% of total statewide assessed values. The declining trend of the residential ratio is shown in the following table. For example purposes, the historical Denver mill levy is presented to show the effective tax rate. Amendment 1, passed in November 1992, essentially prevents mill levies from increasing without voter approval. The combination of a fixed mill levy and a decreasing assessment ratio has been, to varying degrees, offsetting increases in property value and, therefore, real estate taxes.

Year	Assessment Ratio	Denver Mill Levy	Effective Tax Rate
1986	21.00%	96.019	2.02%
1987	18.00%	49.745	0.90%
1988	16.00%	58.947	0.94%
1989	15.00%	67.375	1.01%
1990	15.00%	67.576	1.01%
1991	14.34%	76.370	1.10%
1992	14.34%	80.741	1.16%
1993	12.86%	80.741	1.04%
1994	12.86%	80.741	1.04%
1995	10.36%	81.161	0.84%
1996	10.36%	80.826	0.84%
1997	9.74%	75.430	0.73%
1998	9.74%	80.814	0.79%
1999	9.74%	67.299	0.66%
2000	9.74%	67.321	0.66%
2001	9.15%	58.745	0.54%
2002	9.15%	59.855	0.55%
2003	7.96%	64.162	0.51%
2004	7.96%	64.402	0.51%
2005	7.96%	66.202	0.53%
2006	7.96%	66.948	0.53%
Denver County Treasurer's Office, 2/2007.

The tax assessment ratio for residential properties has declined in stages from 21% to the current level of 7.96% over the last 20 years and probably will continue to decline, barring a change in tax laws, reducing future tax liability.

Properties are reassessed every 2 years. Sales from 2003 and the first half of 2004 were used to estimate the value as of January 1, 2005 and January 1, 2006 for taxes payable during 2006 and 2007. The assessor will use sales from 2005 and the first half of 2006 to estimate property value as of January 1, 2007 and January 1, 2008, for taxes payable during the first half of 2008 and 2009.