DENVER (KDVR) — Coloradans are seeing a big hike in property tax assessments, but a new state law can help taxpayers defer what they owe.
Taxpayers can challenge their property’s assessed value and possibly get a break on the tax bill. But if that doesn’t work, the state’s property tax deferral program just expanded this year to include more Coloradans.
The program originally helped older Coloradans and active military personnel. But as of Jan. 1, it was expanded to include anyone whose property taxes exceed a certain percent of the property tax-growth cap.
“The tax-growth cap is met when the current year’s property tax amount has increased 4% or more from the average of the two preceding tax years’ amounts on their owner-occupied parcel,” according to the Colorado Department of the Treasury.
Property owners can defer between $100-$10,000 in taxes. If approved, the state makes the approved payment amount directly to the county by April 30 of that year.
Taxpayers will be required to pay it back.
“The deferral program does not exempt taxes; it is a loan to assist Coloradans with the payment of real property taxes if an application is submitted and the applicant is eligible,” according to the Treasury Department. “The deferral loan is recorded as a junior lien against the participant’s property and does not have to be repaid until the participant no longer qualifies to defer the approved amount.”
Who qualifies for Colorado’s property tax deferral program?
According to the state, here’s who is eligible:
- Any person 65 or older as of Dec. 31 of the year in which the person files a claim
- A person called into military service on Jan. 1 of the year in which the person files a claim.
- Any person who does not qualify for the Senior or Active Military programs and property tax liability grows by more than 4% from the average liability for the two property tax years prior
The home must be owner-occupied. It cannot be income-producing, like a rental property.
How much is interest on the property tax deferral?
From May 2023 through April 2024, the deferral interest rate is 4.125%, according to the state. That rate changes every year according to the published 10-year rate on Feb. 1.
How can taxpayers apply?
Applications reopen on Jan. 1, 2024. If approved, the state will pay before May 1 of the year taxes are due.
Taxpayers have to reapply each year to continue deferring the last year’s taxes and to request it for the current year.