Editor’s Note: This story has been updated to correct the reduction in taxable value in 2024. The initial number provided was incorrect.
DENVER (KDVR) — A plan for property tax relief is now state law, with the issue to go before Colorado voters this fall.
Gov. Jared Polis signed Senate Bill 303 into law on Wednesday. During a ceremony, he and lawmakers touted the effort as a way to reduce property tax payments over the next decade.
“I’m confident that this will save money for every Colorado taxpayer in some way, shape or form,” Polis said.
The governor and fellow lawmakers said homeowners will save an average of around $1,100 over the next two years. Non-residential property owners would pay about 11% less in property taxes over the next decade, Polis said.
Another part of the bill would allow older Coloradans who downsize to keep their homestead exemption.
When pressed about what effect the law could have on renters, Polis and Senate President Steve Fenberg argued that without relief, property tax increases would be passed onto renters in greater amounts.
“If we didn’t pass this it would be devastating for our rental community across the state,” Fenberg said.
What is Proposition HH?
Senate Bill 303 puts the tax relief plan on the November ballot as Proposition HH.
It’s designed to lower property tax rates for the next 10 years. To cover resulting revenue losses for local governments, which rely on property taxes to fund services, it would also allow the state to use surplus money that would otherwise be refunded because of TABOR.
The Taxpayer Bill of Rights caps how much revenue the government can take in and refunds the surplus to Colorado taxpayers. If approved, Proposition HH would kick a separate bill into gear: TABOR refund amounts would be flattened to one amount for everyone, with each taxpayer to get a projected $661 check next year.
Here’s how Colorado Democrats describe what’s in the plan:
- Reducing the residential assessment rate from 7.15% to 6.7% in 2023 and 2024, and continuing this reduction for primary residences
- Incrementally reducing the business property assessment rate from 29% to at least 26.9% by 2032
- Reducing the taxable value of residences by $50,000 in 2023 and by $40,000 in 2024, continuing this reduction for primary residences (not second homes or investment properties)
- 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 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
Group sues over property tax plan
Property taxpayers in Colorado are facing double-digit increases in their home valuations and rising property taxes because of that. Colorado Democrats rushed the property tax measure in the waning days of the legislative session, causing contention with Republicans who opposed it.
The effort already faces a court challenge. Conservative group Advance Colorado sued in Denver District Court, claiming the law uses unclear language and addresses too many topics, in violation of the state constitution.
Another bill signed during the ceremony addresses how commercial property is taxed in the state and streamlines the appeal process to help “the little guy,” according to Rep. Bob Marshall, a Douglas County Democrat who sponsored the bill.
