Understanding Your Client's 2025 Property Tax Bill: A Guide for Real Estate Professionals
When the appraisal process wraps up and property values are established, clients inevitably turn to you with one burning question: "What will my property taxes actually be?"
At Canyon Title, we know you need clear answers to guide your clients through this complex landscape.
The Foundation: How Values Are Determined
Property assessments for 2025 reflect:
- Property conditions as they existed on January 1, 2025
- Sales data spanning July 1, 2022 through June 30, 2024 (24-month analysis period)
- Some counties utilize an 18-month window starting January 1, 2023
The Tax Calculation Formula
Converting assessed value to actual tax liability involves three core components:
- Assessed Property Value (established through the appraisal process)
- Assessment Percentage Rate
- Local Mill Levy
However, the calculation becomes complex due to various adjustments:
- Senior citizen reductions
- Veteran benefits
- Agricultural land classifications
- New construction exemptions
- Residential value exemptions ($55,000 deduction enacted in 2023)
- Properties with tax-exempt status
- Special temporary relief programs
Colorado's Tax Policy Evolution
2020: Gallagher Amendment Repeal
Voters eliminated the Gallagher Amendment, ending the requirement for fixed ratios between residential and commercial property tax contributions. Key changes included:
- Elimination of automatic assessment rate adjustments
- Increased legislative authority over tax policy
Understanding "De-Brucing" in Metro Districts
Newly formed metro districts typically opt out of TABOR restrictions during creation because:
- Districts can retain revenue from property value growth
- Tax rate increases still require voter consent
- Developers, as initial landowners, typically approve these measures
2023: The Value Surge Impact
Property values increased over 40% in many areas, yet most taxing jurisdictions maintained existing mill levy rates. This created significant tax bill increases that surprised many homeowners.
Current Assessment Rates (2024)
- Residential Properties: 6.7% plus $55,000 actual value exemption
- Commercial/Non-Residential: 29%
2025 Changes: Dual Assessment Structure
Senate Bill 24-233 introduces split residential assessment rates:
- School District Portion: 7.15%
- All Other Local Government: 6.7%
This change aims to create more balanced funding distribution among different government entities while maintaining overall equity.
Important Note: TABOR provisions remain in effect—the legislature can reduce rates independently but requires voter approval for any increases.
Senior Homestead Benefits
The Senior Homestead Exemption provides substantial tax relief:
- Benefit: 50% reduction on the first $200,000 of actual property value
- Age Requirement: 65 years or older as of January 1
- Residency Standard: 10+ years in the property
Special 2025-2026 Provision: Seniors who relocated within Colorado between 2020-2024 remain eligible despite not meeting the standard 10-year residency requirement—a significant benefit for downsizing retirees.
Key Takeaways for Real Estate Professionals
Modern property tax calculations have evolved beyond simple formulas:
- Assessment values are established early in the process
- Rates and exemptions can shift throughout the year
- Strategic planning becomes increasingly important
Your Role as a Trusted Advisor
To best serve your clients, focus on:
- Explaining the factors that influence their specific tax situation
- Identifying available discounts and legislative updates that may apply
- Preparing clients for the complexity beyond the initial property value
Canyon Title is here to support you and your clients through every step of the real estate transaction process. For additional resources or specific questions about property taxes in your area, contact our team.