FRISCO — In January, the Summit County Treasurer’s Office started sending annual property tax bills to county homeowners. The tax bill came with sticker shock for some who posted on social media and contacted the Summit Daily News, complaining about how their property tax bill had significantly increased.

Summit County Treasurer Ryne Scholl and county Assessor Frank Celico, along with staff members from their respective offices, explained how the property taxation process works, including why homeowners are seeing a higher tax bill this year.

Property taxes are calculated based on three factors: a property’s value, the current applicable assessment rate for the type of property and applicable mill levies. The three are calculated together, and the result is the tax bill the homeowner gets in the mail. Property taxes are paid in arrears, so tax bills received in 2020 pertains to property taxes owed for 2019. 

Property value

To determine property value, the assessor’s office uses property sales data that is refreshed every two years. This year is an “intervening” tax year, meaning the value is based on a tax rate from home sales data between 2017 and 2018 and applied to the 2019 tax year.

Individual properties are assessed based on sales of similar properties in the neighborhood. Celico said, for example, a 5,000-square-foot ski lodge near a resort would be valued according to sales prices of other properties with comparable sizes and locations that were sold between 2017 and 2018. The same goes for a condo in a multifamily development. It would be assessed according to sales of other similar size and type condos in the development.

Celico and Scholl explained that property values in Summit County have seen a significant increase in the past few years, and the jump in property tax bills is mainly due to those increases after the new rate went into effect in 2019.

Assessment rate

The applicable assessment rate depends on whether a property is residential, commercial or another category, such as agricultural or a vacant lot. Due to the Gallagher Amendment, a Colorado constitutional provision passed in the 1980s, revenue from residential property taxes cannot exceed 45% of the state’s total property tax revenue, while commercial property taxes make up 55% of total revenue. 

Furthermore, Gallagher requires that commercial property have a fixed 29% assessment rate, while the residential assessment rate is a floating number that changes every odd-numbered year to maintain the 45% to 55% residential to commercial tax revenue ratio. For the 2019 property tax year, the residential assessment rate is 7.15%, a drop from the 7.20% rate used in 2017 and 2018.

That 7.15% rate is multiplied against a home’s value to find the assessed taxable value. So if a residential property is valued at $100,000, the assessed value of the property would be $7,150. That would be multiplied by the local mill levies to determine the property tax bill.

Mill levies

Mill levies are voter-approved taxes for various local governments, services and programs. In Summit County, that includes the county government, Summit School District, Colorado Mountain College, local town taxes, Colorado River District, the fire districts and other mills that have been tacked on through local initiatives over the years.

Each mill levy is multiplied by the assessed value of the home to produce individual taxes, and the property tax bill is a product of the mill levy taxes added together.

A sample property tax bill sent to the Summit Daily gave the example of a home with a property value of $746,051. When multiplied with the assessment rate of 7.15%, the home’s assessed value comes out to $53,343. That number is then multiplied by the various local mill levies. Summit School District has a levy of 19.092 mills, which when multiplied by the assessed value results in a $1,018.42 tax for schools alone.

When all the other levies are added, the property tax bill for this sample home totals $2,801.63.

Scholl said that taxpayers are always able to protest their tax bill if they believe it is erroneous. They first can appeal the bill to the county commissioners, but if they do not find satisfaction there, they are then able to take the matter up with the state board of assessment appeals. However, that protest would apply to the property tax bill only for 2020, which would be received in 2021. Instructions to appeal property tax valuation is provided on tax bills homeowners receive.