Denver
(Colorado) County assessors have completed their property
valuations which are
used to help determine property taxes charged
for 2014 and 2015.
Colorado’s Property Tax Administrator, JoAnn
Groff, said at a news conference to announce the findings that
“Property owners are still
getting the advantages of the downturn
in the economy”.
The
latest figures show that residential property valuations for
Colorado
were down approximately 2.5% compared with the 2010
study. In Denver
County alone, the value of single family homes
(including condos) declined by .9%, although condo values actually
dropped more than 7%.
On
the surface, this appears to be good news from home owners
who in many
instances will see a slight drop in the amount of property
taxes which
will come due. Estimates are that better than 60% will
pay less in
Denver County.
However,
this actually should be “better” news than it really is.
The report
goes on to state that, based on higher occupancy and an
increase in
rents, apartment buildings in the County combined to show
a 22.6%
increase in value. The majority of those come from the “high
rise”
apartment buildings, which results in big bucks value increases.
What
does the increased value of large apartment buildings have to do
with
property taxes for a single family home development on the other
side of
the County? More than you might think.
The
County Assessor considers these high rise apartment buildings
to be
“residential property” just the same as one single family home
on a
single piece of property. As a result, the 22.6% increase in
apartment
building values has served to collectively raise residential
property
values in Denver County.
This
means that a condo owner, whose property may have lost upwards
of 10%
of its value within the past two years (given that the average for
the
County is 7%), does not see a 10% decrease in their property taxes
going forward. Instead, that owner may see only a 2.5% decrease,
likely a
difference of hundreds (or more) dollars.
Although
you cannot take the percentages in the above paragraph
literally, as
specific properties are assessed based on several factors,
the point is
that the “overall” findings do impact the property taxes
going forward.
What
this does show is that owners are being impacted by renters.
I’m sure
that many of the owners of those apartment buildings are doing
cartwheels about these findings. The “increased rents” help to increase
the value of their properties, which translates to increased cash flow
(if
not profit) for them. Yet, the lost value of single family homes
serves to
reduce the amount of property taxes those owners will pay for
at least
the next couple of years.
Going
forward, it will be interesting to see if the investment groups which
have been focused on picking up bargain foreclosures and short sales
(and driving down the single family home prices) over the past couple of
years would now turn their attention to large apartment buildings
instead.
Obviously, this situation in Colorado might be very much different from
what is going on in this regard in your area. If you are not certain, it might
be worth looking into!
If
you are a home owner, keep this in mind even if you see a decrease. Be
sure you are aware of any options to appeal your next or next year
property tax
assessment.
