Residential values to spike from local sales
Phillips County real property owners will receive their 2019 notice of valuation in early May, and, for the first time in several years, most will see sharp increases in their official property values.
The notice 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. As a result, property tax assessments lag behind current market conditions.
The 2019 valuations will be based on a June 30, 2018, level of value, using market sales data from July 1, 2016, through June 30, 2018, when the local market grew, due in part to low inventory and a buoyant national economy.
Any market conditions that have occurred between June 30, 2018, and today will not be recognized until the 2021 reappraisal cycle.
From June 2016 to 2018, the number of residential sales remained consistent with past years; however, the sale prices of these transactions increased drastically. 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 $30,000 to $90,000 or more, based on comparable sales in the county.
“It’s the biggest increase in quite some time,” county assessor Doug Kamery said. “Based on the sales and what’s been going on, this is a supply and demand situation.”
“Folks are coming to the closing tables with $5,000, $10,000, $20,000 above the asking price,” he added.
The commercial market remained stable or has shown a slight increase this appraisal cycle.
Appraisal of agricultural land for ad valorem taxation purposes involves an “agricultural landlord formula.” In the formula, the net income for the landlord is calculated using a 10-year averaged published commodity price or grazing rental rate multiplied by the local production yield (2008-2017 for 2019).
This yield is based on soil classification or carrying capacity. Typical landlord expenses are also averaged over the same 10-year period and subtracted from the landlord’s gross income to arrive at the landlord’s net income. This net income is capitalized by the statutory capitalization rate of 13% to arrive at the ad valorem value.
For the 2019 reappraisal, there will be a slight increase in dryland and grazing lands, and a slight decrease in irrigated land values.
Taxes are calculated based on the market valuation, assessment rate and mill levy (market value x assessment rate = taxable value x mill levy = taxes).
The assessor’s office is only responsible for establishing valuations, not taxes. The county assessor is responsible for valuing all property in the county as directed by state laws.
Currently, the assessment rate for residential improved properties is 7.2% but is expected to decrease to 7.15%. Therefore, even though home values increased, the tax burden associated with that increase may not be as substantial. All other property types have an assessment rate of 29%.
The last component used to calculate taxes is the mill levy. Mill levies are established by the county commissioners, school districts and the boards of the various taxing entities (fire, recreation, hospitals, cities, towns, etc.). A summation of these various individual levies is applied to the taxable value to determine the taxes due.
After receiving your new notice, please review the change in value. If you disagree with the revised valuation, not the increase in taxes, there are detailed appeal procedures on the back of the notice. No phone appeals can be accepted.
For questions or concerns regarding a notice, contact the assessor’s office at 970-854-3151 or doug.kamery@phillipscounty.co.
If you would like to view property information and sales data online, visit the website at http://www.phillipscogov.com/assessor.