The news at the end of April that Colorado property taxes were going to rise by 40 to 60 percent sent homeowners and businesses into a near tailspin.
Late Thursday evening, the Colorado Senate approved landmark legislation that would provide historic property tax relief for homeowners and businesses while ensuring funding for schools and other local governments is protected. Whether this bill can make it through the Colorado House before the end of the session is anyone’s guess.
As drafted, SB23-303 is an urgent bill, approved by the Senate and sent to the Colorado House. It would save taxpayers more than $1 billion on their property taxes; which were projected as a dramatic rise due to the rapid increase in Colorado property values.
Sponsored by Senate President Steve Fenberg, D-Boulder, and Senator Chris Hansen, D-Denver, it creates a long-term solution to prevent growing home values from raising property taxes, and creates limits that protect homeowners and businesses from steep unexpected increases in their property taxes. If it passes both houses, it would need to become a November ballot question.
“Coloradans are about to get hit with painful property tax spikes, which is why we’re taking action now to meet the moment and provide real relief for Colorado families,” said Fenberg. “This transformative proposal delivers long-term reductions in property tax rates while providing immediate savings on this year’s property taxes, so we can better support our schools and our communities and build a Colorado everyone can afford to love.”
Coloradans would vote on this package in November, and if approved the proposal will provide major long-term reductions to property tax rates while delivering immediate savings on property taxes this year.
Combined with property tax reductions the legislature previously enacted via SB22-238, this proposal will cut the average homeowner’s tax increase in half, saving $1,264 on average over the next two years. In total, this package would provide between $900 million and $1.6 billion annually in property tax relief for homeowners and businesses in Colorado.
“The cost of housing in Colorado is incredibly high, and if we don’t act, Coloradans will suffer record increases on their property taxes. This would be especially difficult for working families, and would hit folks on fixed incomes incredibly hard,” said Hansen. “That’s why we’re working to provide immediate property tax relief that will save families across our state millions of dollars and keep people in their homes.”
“This proposal will also give voters an opportunity to protect sustainable funding for our schools and local services like hospitals and firefighters while addressing the urgent property tax situation,” he added.
Other property tax relief and protections proposed in this plan include:
- Reducing the residential assessment rate from 7.15 percent to 6.7 percent in 2023 and 2024, and continuing this reduction for primary residences.
- Incrementally reducing the business property assessment rate from 29 percent to at least 26.9 percent by 2032.
- Reducing the taxable value of residences by $40,000 in 2023 and 2024, and continuing this reduction for primary residences (not second homes or investment properties) in future years.
- Capping the growth in district property tax collections excluding school districts at inflation and allowing local governments to override the cap after giving notice to property owners.
- Protecting funding for public education and backfilling revenue to fire districts, water districts, ambulance, and hospital districts in areas of the state that aren’t growing as fast by dedicating a portion of the state’s TABOR surplus to backfill.
- Providing seniors who currently receive the Homestead Exemption a larger reduction of $140,000 and allowing them to continue to receive this reduction if they move.
SB23-303 will now move to the House for further consideration.