Are Property Taxes Affordable in Summit County?

 

 

The short answer is YES, property taxes are affordable in Summit County.

The median property tax (also known as real estate tax) in Summit County is $1,671.00 per year, based on a median home value of $465,700.00 and a median effective property tax rate of 0.36% of property value.Only 10 states rank lower than Colorado for property tax rates.  These states include Alabama, Arkansas, Delaware, Hawaii, Louisiana, Mississippi, New Mexico, South Carolina, West Virginia and Wyoming.  Utah ties Colorado at .6% (.006) average property tax rate across the state. Compare our taxes to New Jersey at 1.89% and Texas at 1.81%, almost 3x what we pay in Colorado.


What are Property Taxes?

Property taxes are a tax on owned property, collected from the property's owner by a taxing authority or government.  They are paid yearly based on valuation by the county assessor's office in each jurisdiction.

 

How Are Property Taxes Calculated?

The property's assessed value is the base taxable value of the property to be taxed.  The property tax rate or mill levy rate is the actual tax rate levied on the assessed value of the property.

Property values are calculated based on a formula using the assessed value, tax rate and mill levy.  These vary specific to each city or municipality in Summit County.


Formula for Calculating Property Taxes:

Assessed Value of Home
x tax rate
------------
= Assumed Value of Home
x Mill Levy
------------
= Property Taxes Owed

Example - Calculating Property Tax on Frisco, Colorado Real Estate:

562,929 Assessed Value of Home
x .0796 (Frisco is 7.96% for house and 29% for lot)
------------
= 44,809.1484
x .046969 (Frisco is 46.969 Mill Rate, so multiple x .046969)
--------------
= $2,104 in property taxes annual

In this example, property taxes are approximately .37%(.0037) of assessed value.

Breckenridge will come out just a tad higher at .423% (.00423) in the city limits.  On a $500,000 assessed value property (assessed value being lower than market/sales value), taxes would be $2,115 per year.


The Bottom Line - Summit County Ranks 8th

Overall, Summit County property taxes come in at .36% (.0036) as an average across the county.

In general, Summit County property taxes are low in comparison to other areas.  We rank 8th out of 64 counties in Colorado for actual tax amount, but that is because of the higher home values.  Our tax rate percentage ranks 53rd out of 64.

Who Decides How Much Property Tax Must Be Paid?

Your local tax assessor determines the taxable value of your property, and sends you a yearly tax bill based on their valuation. Property taxes are often used to cover local services such as: 

School District Taxes
Municipal Garbage Disposal Fees
Municipal Utility Fees
Library Fees
General County Fund Taxes

How Do You Pay Property Taxes?

Your tax assessor will send you a property tax statement several months before your property tax is due. If you do not carry a mortgage on your property, it will be your responsibility to pay the property taxes directly.

If you currently have a mortgage on your property, the mortgage company will pay the property taxes on your behalf.  When you initially get your mortgage, your lender requires you to pre-pay your property taxes and this money is put into an escrow account.  Each month, a portion of each mortgage payment is then put into escrow to accumulate funds for the next property tax payment, essentially bundling your property tax payments into your monthly mortgage payments. 

Why are Assessed Values Almost Always Lower Than Market Price?

In Summit County, property values are re-assessed every 2 years.  2013 was our last reappraisal year and new values were communicated to property owners on May 1, 2013. Per Colorado statute, the Assessor will use data from the 18 months to 60 months prior to June 30, 2012 to determine 2013 values.  As a result, property values will lag 1 to 5 YEARS behind current market values.  This helps to explain why tax assessed values are almost always below list and sales price on real estate in Summit County.  The only exception here will come in a huge market decline or collapse in the real estate market.  We saw this with 2011 valuations, as assessed values in 2012 were much closer to real estate market price.

For more information on property taxes or questions in general about the real estate market or trends in Summit County, Colorado, pleasecontact us.