Residential values to increase due to local sales

Phillips County Assessor Doug Kamery reports, in early May 2021, Phillips County real property owners will receive a 2021 Notice of Valuation. This document is the result of a countywide reappraisal and reflects changes in market values over a two-year period. The values on these notices will reflect what the property owners value will be for the 2021-2022 tax years.

Under Colorado law, County Assessor’s offices throughout the State conduct a complete reassessment of all properties in their county every two years. As a result, property tax assessments are always lagging current market conditions. The 2021 valuations will be based on a June 30, 2020 level of value, using market sales data from July 1, 2018 through June 30, 2020. Any recent market conditions that have occurred between June 30, 2020 and today will not be taken into consideration when establishing the new 2021 valuations. These factors will not be recognized until the 2023 reappraisal cycle.

During the two-year period between June 2018 and June 2020, the number of Residential sales remained consistent with past years, however; the sale prices of these transactions increased substantially. 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 $90,000 or more based on comparable sales in the county.

“Even though Covid hit in the last four months of this cycle we are seeing little to no effect on sale prices,” said Kamery.

The Commercial market 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 to the landlord is calculated using a 10-year averaged published commodity price or grazing rental rate multiplied by the local production yield. (2010-2019 for 2021) 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 percent to arrive at the ad valorem value.

For the 2021 reappraisal, there will be a slight increase in dryland and grazing lands, and a slight decrease in irrigated land values.

Taxes are based on three factors: the market valuation, the assessment rate, and the mill levy. Market Value x Assessment Rate = Taxable Value x Mill Levy = Taxes.

The Assessor’s Office is solely 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 7.15 percent. All other property types have an assessment rate of 29 percent. 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 of Valuation in May 2021, 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. We regret no phone appeals can be accepted. If you have any general questions or concerns after receiving your notice, please contact the Phillips County Assessor’s Office at (970) 854-3151 or email us at [email protected]. If you would like to view property information and sales data online visit our website at: http://www.phillipscogov.com/assessor/web.