something to be aware of...property taxes are increasing...
from denverpost.com
Homeowners across the northern Front Range can expect sticker shock when they see the big jump in property values that county assessors are now informing them of.
The valuation notices, however, don't answer how much property taxes will bite until a complex set of discussions and calculations take place over the next several months, resulting in final tax bills out in January.
"I don't know what the taxes on my house will be," Denver assessor Keith Erffmeyer admits.
Denver home values are up 29.6 percent between June 30, 2012, and June 30, 2014. But that is only a median. Home values rose a startling 69 percent in Globeville, with nearby Elyria-Swansea at 68.3 percent.
Higher taxes are on the way, but they won't match the increase in property values dollar for dollar, assessors said.
For starters, those who disagree with the value assessors have determined get until June 1 to protest and knock them lower.
Property owners can appeal if they don't like the assessor's decision on the initial protest. Once the bulk of those protests and appeals are handled, by August, assessors can certify the overall property tax base in their counties.
Once that happens, the various taxing districts can set their budgets, which in turn will determine the tax rate or mill levy, within the limits set by state law.
For the past two assessment cycles, the focus has been on falling or flat values, not rising ones, keeping the protests at a minimum.
But with increases so large across so many parts of the metro area, assessors expect a bigger reaction.
Denver has only 25 appraisers spread across 214,000 properties, Erffmeyer said. Corbin Sakdol, the Arapahoe County assessor, said he has 33 licensed appraisers, plus another 30 staffers, to deal with 206,000 properties.
In its favor, Denver has a 311 call center where staff members are trained to field queries on property values and quash any non-starters, a resource that other counties lack.
Sakdol said outsourcing to a third-party call center would have required extensive training of outside staffers, so he decided to keep it in house.
"We are optimistic we won't have lines like the Department of Motor Vehicles," Sakdol said.
Protest protocol
The first step to a successful protest is knowing whether one is even worth pursuing, said Dariush Bozorgpour, principal of Property Tax Advisors in Aurora.
Bozorgpour said he files protests in only about four of every 10 requests for help. He recommends people research comparable home sales available on real estate websites or from a friendly real estate agent.
Any comparable sales must be before June 30, 2014, the cutoff used by assessors — the closer the better.
Those likely will confirm what the assessors found, but that doesn't mean there aren't other avenues. Bozorg pour said if homeowners can prove their homes are in poorer condition than those used in the comparable sales, they might have a case.
That could include a leaky or worn roof, an unfinished or moldy basement or an interior replete with 1970s wood paneling and avocado appliances. Photos should suffice, although Erffmeyer said he had one taxpayer cut out and bring in a piece of groovy shag carpet.
Homeowners also have a stronger hand if they can show an appraisal, say for a mortgage refinance, before and near the June 30 cutoff.
Assessors said they understand why some property owners, especially those not following real estate trends, may get upset when they see how much values have increased.
But they need to understand the gains are over two years, not one. And they need to understand the math behind the big increases that can follow big losses.
A home that lost half its value in the downturn would need to increase by 100 percent to just get back to even. The largest percentage increases are coming primarily in neighborhoods hit hardest by foreclosures.
An interesting side note is that if a large number of protests succeed, those who don't raise a fuss could end up shouldering more of the overall tax tab — not unlike how the water drinkers get shortchanged when the wine drinkers in a dinner party suggest splitting the bill evenly.
After the property base is set, then the real fun can begin — drawing up budgets for local governments and special districts to determine the tax rate or mill levy.
In Arapahoe County, for example, there are 355 taxing jurisdictions, Sakdol notes.
Each jurisdiction will calculate its budget, in part based on the increases that higher property values allow, but also within limits set by the Taxpayer's Bill of Rights, Gallagher and other state rules.
Many local governments, including Denver, have received permission from voters to retain tax revenues that exceed TABOR limits.
But even in areas that have voted to exempt themselves from TABOR limits, it is unlikely that officials will seek a 20 percent budget increase to match the increase in values just because they can.
Citizens must engage
In Denver, the most property tax collections tied to the general fund can increase are 6 percent a year, a cap put in to protect taxpayers from the situation now taking shape.
Even if property owners don't have grounds to protest a valuation, they should weigh in as local budgets are set, advised Douglas County assessor Lisa Frizell.
"It is important for citizens to engage," she said.
Bozorgpour said he expects the fiercest challenges will come not from home owners but from owners of apartment buildings, who avoided the big value run-ups a decade ago but are now front and center.
Denver multifamily properties are up a median 33 percent in value, and Bozorg pour said he heard from one woman who had her apartment building's value boosted to $2.8 million from $1 million.
"She is just beside herself," he said.
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