Summit County fending off several high-dollar property tax reassignments
December 18, 2016
County Assessor Beverly Breakstone has been taking a lot of field trips lately due to new developments in Summit that could have sweeping implications for local coffers.
Since April, she's repeatedly gone on fact-finding missions, visiting land parcels throughout the county, from Baldy Mountain in Breckenridge to the Willowbrook Subdivision in Silverthorne, Bill's Ranch to Angler Mountain, and the town of Blue River to Keystone Ranch. What she's recorded as the county agent that calculates the assessed value of personal property could be the difference in hundreds of thousands of tax revenues in years to come that go toward vital county services. After 25 residents recently filed appeals challenging the given designation for properties they own — arguing what is presently tagged vacant should be reclassified as residential — the assessor and her staff got to work.
How land is labeled may not sound like a big deal, but it's actually the difference of a more than 20-percent tax break that the county is trying to uphold. In turn, Breakstone took a page out of a Sherlock Holmes novel and has spent time traversing the region for the last handful of months, sleuthing for any signs of life — footprints, campfires, even domestic animal droppings — to help bolster the county's aim of maintaining the swathes of land as uninhabited.
"I go and scope," said Breakstone, who has been in the elected office since 2007. "I look for residential use and I look for any activity. I've looked for dog poop; I've looked for anything. Often there's not even a tree rustled.
“It’s so dramatic now. You’re now looking at two-thirds difference in taxes to go from vacant to residential. That’s what’s prompting all of this.”Beverly BreakstoneSummit County Assessor
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"Residents can get pretty creative," she added, citing one claimant whose argument rests mainly on a historic outhouse on the adjoining land. The antiquated amenity possesses a padlock, is no longer in use and must eventually be removed based on updated town codes.
The primary bone of contention on these citizen appeals — with a potential for as many as 80 across Summit — is one or more land parcels adjacent to a residence, and with a property line drawn between them, that presently have vacant status. Assessor reclassifications are not uncommon each year, but only when truly residential use can be documented and proven according to county definitions as they are currently on the books. What's key in deciding each of these cases moving forward is the specific language used to define a contiguous property, common ownership, as well as how a future sale of these landholdings might combine or split up the properties.
All of it really stems from the evolution of property tax code in Colorado, dating back to 1982. That's when voters passed Amendment 1, better known today as the Gallagher Amendment, to the State Constitution in order to refine land fees and ensure more equitable rules for how people pay taxes associated with their property. Before the adoption of Gallagher, property was reassessed every four years.
During the 1970s, property values were soaring in the state and Coloradans were concerned with the devastating tax hits they might endure. The amendment changed how these land burdens were figured. While vacant property has remained at a 29-percent tax since the passage of that law, residential has fallen from 21 percent to just below 8 percent through the course of time based on an evolving calculation. In other words, the incentive to have land nearby considered connected with a home has never been greater.
"It's so dramatic now," said Breakstone. "You're now looking at two-thirds difference in taxes to go from vacant to residential. That's what's prompting all of this."
Recognizing the possible savings for home and landowners, the Denver office of financial services firm Duff & Phelps solicited 1,500 residents around Colorado, netting approximately 170 clients thus far who opted to file an appeal in their respective county. More are still likely to come, with 120 of those cases having already been heard by the state's Board of Assessment Appeals (BAA) and at least another 50 still pending. On average these decisions take between 30 and 45 days.
Many of those requesting assessor review say they either use these abutting open spaces — sometimes those separated from the on-site dwelling by a major road — for parking, to walk their dogs or recreate, or as view corridors corresponding to their physical home. But unless it's directly related and considered integral to the residence, the assessor does not deem that land residential. The representatives for the plaintiff group see it otherwise, asserting that such interpretations miss the mark. (Several attempts to reach F. Brittin Clayton, a litigation attorney at Denver-based Ryley Carlock & Applewhite representing Duff & Phelps on these property claims, were unsuccessful.)
Six of the county's disputes were heard first by the state board, with a seventh not long thereafter. Although the merits of each is decided on a case-by-case basis, Summit's proceedings were those initially received. That means they could be the trial balloon and help set the precedent for the how those cases currently in 20 of the state's 64 counties — in high-cost neighbors like Routt, Pitkin and Eagle — are decided as a whole.
Whatever the resolution, it's likely these land tax quarrels end up in the Colorado Court of Appeals to settle the matter once and for all.
"Now that the BAA realizes this is of such statewide concern, they might as a group make a decision on our cases, and then we'll have a focus as to how we're being interpreted on this issue," said Breakstone. "I think we'll go to the court of appeals, or the residents will, because these are legal issues that are ultimately being decided."
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