So your property tax values went up —

by Nelson Holmes
HUERFANO- So, it seems that quite a few property owners are perplexed by their notices of value, heretofore to be referred to as the NOV. I am no longer a Colorado tax appraiser and I’m writing this from a protected enclave in another state, so I’m gonna’ give you the straight dope which, I hope, will help salve the angry, pink and puffy. Let’s get those heart rates back into normal range and break the process down into digestible bits.
The NOV is sent to property owners every year. 2011 was a reappraisal year, 2012 will be an intervening year. Barring changes made to the property characteristics, values remain the same for two years.
If changes are made, how does the Assessor’s office know when you add that porch or tack on a balcony? When a building permit is taken out with the Building Inspector’s office that info is sent to the Assessor’s office where a dutiful tax appraiser or data collector takes that info into the field and measures off the new addition. Then, the added attribute or square footage is entered into the Computer Aided Mass Appraisal (CAMA) data base and a new value is derived.
If no changes are made, the value established during the reappraisal year is carried over to the intervening year unchanged. The NOV indicates separate values for the land and for the buildings on site. Buildings on the property are referred to as improvements. You may not have so much as swept your home for fifty years, so don’t get unhinged at the noun improvement — it just means the structures on site.
The values on the NOV are actual, not assessed, values. The values for residential properties may only be derived from market sales from within the statutorily mandated 18-month collection period. So for the last reappraisal the data was gathered from sales occurring between 1/1/2009 and 6/30/2010. If your neighbor sells his house for half its value on July first 2010, survey says, no bueno. Job one in the Assessor’s office is sales analysis. The sales from the 18-month sampling are combed over thoroughly and those that smell funny are investigated and then eliminated for cause. Only arms length transactions (AMTs) qualify as sales for the sample.
What’s an AMT you ask, showing your hip grasp of acronym chic? Well, it’s a transaction between a willing buyer and a willing seller both acting in their own best interests. This eliminates some distress sales, sales to settle estates and the moronic “Oh, it’s so quaint, it may be the first house I’ve looked at but I’ll pay whatever ghastly sum you ask” sale which is oh-so-common in La Veta. The information about the sales is taken from a confidential document called a TD-1000. This form, by law, must be filled out by the buyer or a paltry fine will be levied. Quite often the form is filled out in a half-assed manner by a cynical realtor and is thus rendered useless. So, unless we can interview the individual who paid three times the amount for which we had a home valued, it’s likely that the sale will stand.
Which brings me to the “values have dropped 30% nationwide so how can they have gone up here” mantra so popular with the cowboy hat crowd. Let’s see… if the average age in America is 55, is everyone in Huerfano county 55? No. The nationwide data is an average. Some places are likely up 10% and some are down 40%. I know the pretty USA Today pie chart doesn’t lie, it just offers a generalized, overly simplistic overview of what’s happening nationwide.
“My realtor says nothing is selling so how do you have the sales necessary to increase my value?” Realtors tend to say those things that will ingratiate them to their customers. If nothing is selling, ask yourself: 1. Have you seen realtors selling pencils from tin cups on a street corner? 2. How many realtors’ offices are boarded up and festooned with cobwebs, and…
3. How come the Assessor’s office has a printout (available for the asking) with all the sales data used to establish values within the county? I promise the Assessor isn’t making these sales up nor is she borrowing a few from adjacent counties. And if our sample were to turn out too lean, the assessor, by law, may only go back in time in six month increments. So the already historical data only becomes more so, and is less likely to reflect current economic conditions the further back it is necessary to go.
“I see ‘for sale’ signs all over the county, how can there be any sales?” Every parcel of land in the county can be up for sale; if a hundred sell and thirty or so are qualified, we have our sample. “Okay, look at this ad, asking $320,000, reduced to $290,000 and sold for $245,000…how can my value have gone up?” Here’s the skinny, the original price was downright ridiculous and was reduced to just plain stupid and still managed to sell for $30,000 over the assessor’s value! The last protest period was ripe with this kind of argument and it was fun to see how those “drastically reduced” prices compared with the Assessor’s records.
As for the impact of these sales, think of a rock thrown into a pond; the ripples are greatest, and will have the most impact, nearest where the rock hit the water. A sale in Cuchara will have the greatest impact on values in that area, with the ripples lessening the further away you go. It is a little more complicated because the Assessor defines seven economic areas within the county that have similar characteristics but may not be contiguous.
Now, for a little sunshine to ease the worried brow. The NOV gives your actual value or what it is believed your home or land would sell for as of the 6/30/10 assessment date. You are taxed on your assessed value which is 7.96% of your actual value for residential properties and 29% for everything else. If your property is worth $100,000 dollars you’re only being taxed on $7,960 of that value. Not quite as ominous, huh?
Since the overworked and understaffed Assessor’s Office can’t visit every property in the county, and since esoteric statistical methods are used, a protest period has been established to allow property owners to challenge their valuations. Don’t let the confrontational nomenclature put you off, if some attribute of your property is incorrect on your valuation, it is important to make a correction. Please realize, though, if you protest that half bath you don’t have and the appraiser comes out, makes note of that, but then sees a 10,000 square foot utility building you assumed you didn’t need a permit for, well, that sucker is going on the tax rolls.
This brings me to a bone that I’ve been picking in quiet desperation for some time, but now I get to speak my mind. If you are lucky enough to own a beautifully appointed second home (far nicer than most folks’ first), and you feel that badgering an underpaid and overworked crew of dedicated employees in an impoverished county is good sport because you fancy yourself a modern day Patrick Henry, please, get over yourself. Huerfano County is one of the finest places on this good earth, and one would think if you owned a precious piece of this county, you wouldn’t mind seeing its services maintained or its infrastructure secured.