Q & A with county assessors
Local property owners will soon receive notices of valuation. Those notices set the value of residential and commercial property and are the basis for how much property tax people pay.
Eagle County Assessor Mark Chapin and Summit County Assessor Beverly Breakstone recently answered a series of questions about the way their offices work.
Q: How many assessed properties are there in the county? Are there any that remain unassessed?
Chapin: Eagle County has 43,620 total real and personal-property parcels; of that total, 6,163 are personal-property accounts. All real property is valued on a two-year cycle, according to Colorado law.
Breakstone: There are 32,029 real property parcels in Summit County. By statute, all parcels must be valued every two years. Some parcels are valued but are exempt from taxation due to being in a nonprofit or religious category.
Q: How do you assess the value of residential property?
Chapin: Residential property is valued based on the market approach in Colorado. Comparable sold properties are utilized to determine the value of all residentially improved property.
Q: How do you ensure that the valuation is fair and not arbitrary?
Breakstone: All 64 county assessor’s are governed by the State Division of Property Taxation and the State Board of Equalization. The process of reappraisal is clearly stated, and our values must fall within a statistically acceptable range, determined by the audit process.
Q: How do you assess the value of commercial property?
Chapin: Commercial property is valued with consideration given the market, cost and income approaches to value. Typically with income producing properties, significant weight is given to the income approach.
Q: A large number of area property owners are not locals. Does this affect property values?
Q: How does the “mass appraisal” process influence the valuation of individual properties?
Breakstone: The mass appraisal process takes data from the sales transactions during our appraisal period which is January 1, 2005 to June 30, 2006. In the mass appraisal process, we analyze the data about those transactions ” qualities such as location, view, structure size and quality of construction and other special features. The data analysis allows us to create an equation that can then be used when we use sales comparables in a given area or neighborhood.
Q: What are the steps necessary for a taxpayer to appeal his property value?
Chapin: Taxpayers may appeal the Notice of Valuation May 1 through June 1 of any year. A determination is mailed by the assessor for each property appealed by June 29. If a property owner is not satisfied with the decision made by the assessor, they can pursue the appeal to the County Board of Equalization. This is followed by other higher level appeal processes.
Q: What is the formula for determining taxes?
Breakstone: The actual value of a property is multiplied by the assessment rate. That provides the assessed value. The assessed value is multiplied by the mill levy to get the tax amount. The assessment rate for residential property is 7.96 percent, for all other, except agricultural, the tax rate is 29 percent. For example, a $500,000 residential property is multiplied by 7.96 percent to get the assessed value of 39,800. This is multiplied by the mill levy for the town or area to get the tax amount.
Q: How are the assessment rates and the tax rates determined?
Breakstone: An amendment to the state Constitution in 1982 called the Gallagher Amendment was a major revision to the tax code. Its goal was to have the statewide tax burden spilt 45 percent for residential and 55 percent for all other property types. In 1982 both residential and other property types were paying 29 percent, but residential has fallen to 7.96 percent in order to keep the 45/55 ratio. Commercial, vacant and natural resource properties, such as mining claims, continue to pay the 29 percent rate.
Q: The assessment rate for commercial property and vacant land is 29 percent. Why is it the same? Why is the residential property assessment rate so much lower, at 7.96 percent?
Chapin: The Gallagher Amendment changed the basis in which property was assessed in the state. The amendment was designed to place less tax burden on residential property. See above answer.
Q: What portion of the land in Eagle County is owned by the federal government or is not taxable?
Both: About 79 percent.
Q: From June 30, 2004, to June 30, 2006, there was a 38 percent increase in the number of Summit County properties priced at more than $1 million. To what do you attribute this? Do you expect this percentage to continue to increase? Why or why not?
Breakstone: Our area is attracting home buyers who have the means to buy higher-valued homes. I have heard lots of speculation on this. Some people feel Vail and Aspen have priced themselves out of the range of many people. Other than that, the answer is anyone’s guess or opinion.
Q: The median price for a single family residence for Summit County is now $713,188. Is this bubble going to burst? Why or why not?
Breakstone: This is not something the Assessor’s Office has any data on. We only know from actual evidence that values are increasing. If the law of supply and demand continues however, our values could continue to increase. Another factor is that we have limited land remaining for development. This could impact values long term.