New Colorado law will change ‘agricultural’ property taxes
Ryan Summerlin April 29, 2011
EAGLE COUNTY, Colorado – People with expensive homes on agricultural land could see their property tax bills rise slightly thanks to a new state law.
Gov. John Hickenlooper said Tuesday he will sign House Bill 1146, a law that changes the way some homes on farms and ranches will be taxed. Just who will be affected by the law and how their taxes will change is still open to interpretation, but the changes aren’t likely to be very big.
The law was passed after years of complaints by commissioners in mountain resort counties that some land owners were taking advantage of a loophole in the state’s current tax laws, paying little in taxes for expensive homes on ranch property, and, in some cases, paying very little tax on agricultural land before it’s developed.
The new law deals only with homes on agricultural land, and how the tax bills on those homes might change depends on one word.
Eagle County Assessor Mark Chapin said higher taxes for home owners will hinge on whether or not a home on a piece of ranch land is “integral” to operating the ranch as a business, something clearly aimed at maintaining the tax status quo for family-operated ranches, in which the business is often run from a home office or the dining-room table.
But, Chapin said, the law will become more ambiguous in other cases, such as if a landowner rents a ranch and the home on it to different people. Chapin said it could be difficult to determine whether a home is “integral” to a ranching business even if the homeowner leases the agricultural property to someone else.
Eagle County Commissioner Peter Runyon has long complained about land owners who buy a piece of land, fully intending to develop it later, but do just enough to earn more favorable tax rates.
“There are dozens of people (locally) who are taking advantage of the tax exemption,” Runyon said.
And, Runyon added, while the new law doesn’t really do much to eliminate what he sees as serious abuses of the law, the new law is a start.
But even that law was hard to pass, Runyon said, primarily because most of the state’s agricultural land isn’t of much interest to those who take advantage of the exemptions.
“The people on the Front Range don’t see the abuses,” Runyon said. “But here, the largest landowner in the county pays less property tax than I do.”