Residential values to increase following trends

According to Phillips County Assessor Doug Kamery, in early May 2017, Phillips County real property owners will receive a 2017 Notice of Valuation. This document is the result of a countywide reappraisal and reflects changes in market values over a two-year period.

Under Colorado law, county assessors’ offices throughout the state conduct a complete reassessment of all properties in their county every two years. The Colorado legislature sets the appraisal date and the annual calendar for the assessment process. As a result, property tax assessments are always lagging behind current market conditions. The previous reassessment was done in 2015; these valuations were based on a June 30, 2014, level of value, using market sales data from July 1, 2012, through June 30, 2014.

The 2017 valuations will be based on a June 30, 2016, level of value, using market sales data from July 1, 2014, through June 30, 2016. Any recent market conditions that have occurred between June 30, 2016, and today will not be taken into consideration when establishing the new 2017 valuations. These factors will not be recognized until the 2019 reappraisal cycle.

During the two-year period between June 2014 and June 2016, the number of residential sales remained consistent with past years; however, the sale prices of these transactions increased significantly. Colorado law requires that all residential property values be determined solely by the market approach to value, also commonly referred to as the sale comparison approach. In some cases, residential home values may increase anywhere from $20,000 to $50,000 or more based on comparable sales in the county.

The commercial market remained stable or has shown a slight increase this appraisal cycle.

This year there will be another increase in ag land values. Appraisal of agricultural land for ad valorem taxation purposes involves an “agricultural landlord formula.” In the formula, the net income to the landlord is calculated using a 10-year averaged (2006-2015 for 2017) published commodity price or grazing rental rate multiplied by the local production yield.
 

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