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Understanding Denver Property Tax

January 28, 2016

If you own property in the Denver area, you may be curious about how property tax is determined. Property tax is a major source of income for states and the federal government, helping to fund our parks and recreation areas, libraries, schools, transportation, and emergency services. Arriving at a fair tax rate is a complex process that can often seem confusing to homeowners. The following provides a basic understanding around how property taxes are calculated and how properties are valued, as well as some general guidelines for paying your property taxes.

How your property taxes are calculated

To calculate property tax, two mechanisms are necessary: assessing the property value and using the mill levy.
  1. Your property’s value is assessed every year based on the local real estate market conditions which then determine the reasonable market value of your home (see “How your property is valued” below).
  2. A mill levy is the tax rate levied—or imposed—on your property value. (The word “mill” refers to one-tenth of one cent. So for $1,000 of assessed property value, one mill is equal to one dollar, according to Mill levies are imposed by the city, county, and school district in any tax jurisdiction based on the amount of revenue they each need to run. The mill levies are calculated separately by each entity and then added together to arrive at a total mill levy for that region.
How your property is valued
An assessor values your property in three ways:
  1. The value of your property based on similar sales in the area (taking into consideration overpricing, underpricing, location, and the overall state of your property).
  2. How much it would cost to replace your property (by determining the amount of depreciation and how much the property would be worth if empty).
  3. How much income you’d make from the property if you rented it (including the cost to maintain and manage it, the amount of insurance and taxes, and the return you could reasonably expect to get from renting the property).
The assessed value is determined by multiplying the actual value of your property by an assessment rate, which is a percentage below 100% that varies by tax jurisdiction. The assessed value is then multiplied by the mill levy, and that number is the amount of your property tax.
For advice on how to lower your property tax, check out these property tax tips.
Denver-specific property tax payment guideline
When it’s time to make your property tax payments, keep the following in mind:
  • You have the option to pay your property taxes in one full payment or in two installments.
  • The first installment is due February 28 (or February 29 during a leap year); the second installment is due June 15; and the full payment is due April 30.
  • Payment can be made via credit card or eCheck online. However, you should note that debit cards that require a PIN can’t be accepted online.
  • You can also pay in person or via mail (see addresses in the link above).
At Bloch, Rothman & Associates, we can work with you to accurately fill out the declaration of Denver property taxes as well as appeal property value on your behalf. Call us to schedule your free consultation at 303-321-7160.