CREJ - Property Management Quarterly - January 2018
Property taxes can be one of the biggest line-item expenses commercial property owners face. It’s important for property owners to understand each state’s specific rules and regulations surrounding property taxes, as they vary across the country. When it comes to Colorado, there are some key differences of which commercial property owners need to be aware. • Colorado’s property valuation cycle. Colorado maintains a two-year valuation cycle. All real property is reappraised every two years on the odd-numbered year. Notice of Valuation letters are mailed to property owners every year on or before May 1. The actual value and classification listed on the Notice of Valuation in 2017 will be the same for 2018. Commercial valuations are based on cost, market and income data during the 18-month period prior to the reappraisal. For example, 2017-2018 values are based on cost, sales and lease data between Jan. 1, 2015, and June 30, 2016. In addition, Colorado utilizes a split tax roll. The assessment ratio for commercial properties is fixed at 29 percent while the residential assessment ratio can vary. It currently is 7.2 percent. Because businesses bear a much greater property tax burden, it is crucial for commercial real estate owners to ensure the valuation of their property is correct. • How to file a property tax appeal. A property tax protest essentially is an evidence-based argument as to why a property’s assigned actual value is incorrect and includes proof that a reduction to the actual value is warranted. If owners chose to file a protest themselves, relevant forms and deadlines can be found on the county assessor’s website. However, property tax appeals can be a complicated process, so many commercial property owners choose to hire consulting firm to handle their appeals. When presenting your case for a property tax appeal, the more in-depth knowledge and evidence presented during the appeals process, the better. •Colorado’s appeal process and deadlines. Colorado has a three-tiered system for property tax appeals. If a property owner disagrees with the actual value or classification placed on his property, the first step is to file a protest with the county assessor. The protest must be received by June 1. The county assessor’s office reviews the protest and will send a Notice of Determination by the end of June or August, depending on the county. If the assessor denies the protest or the property owner is not satisfied with the decision, the owner has the option to file a second-level protest to the County Board of Equalization by the deadline listed on the Assessor Notice of Determination.
A hearing is held by the County Board of Equalization and a neutral third-party hearing officer makes a decision based on evidence presented by the property owner or owner’s agent and the county appraiser. If not satisfied with the results of the County Board of Equalization protest, the property owner can appeal the decision to the State Board of Assessment Appeals, District Court or Binding Arbitration within 30 days of receiving the County Board of Equalization Notice of Decision. Information on filing an appeal to the State Board of Assessment Appeals can be found on its website. If a property owner does not file a protest by the June 1 deadline, he may be eligible to file an abatement petition and receive a refund on taxes paid. Abatements can be filed within two years after Jan. 1 of the year following the year in which the taxes were levied. The abatement processes are similar to the appeal process but with a lengthier timeline. For example, if a property owner suspects her property was overvalued in 2015, the deadline to file an abatement for the 2015 tax year was Dec. 31, 2017.