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  • Phone: 970-328-8640
    Fax: 970-328-8679

    P.O. Box 449
    500 Broadway
    Eagle, Colorado 81631  

How Property is Valued

Discovery, Listing, Classifying and Valuing Property 
The assessment process involves discovering and listing information about properties and determining property values. It also involves analyzing the values to ensure they meet the standards of fair assessment, and certifying the assessment roll to the appropriate taxing authorities. To ensure equalization, the Assessor must determine residential property values by using only appropriate market information. Values for most other properties are determined from relevant cost, market, and income data.

Information Collection
The first step in the assessment process is to gather information on ownership, location, use, sales, building measurements, construction type, construction costs, and rental income. Primary sources for this information are real property deeds and declarations, subdivision maps, building permits, and local building contractors. Other primary sources are declarations filed by owners of taxable personal property and appraisers who conduct on-site inspections to gather land and building characteristics. The Assessor stores, updates and maintains this information for current and future use in the assessment process.

Appraisal – Estimating Value
Real property (land and buildings) is reappraised by the Assessor’s Office each odd numbered year. The value determined by the Assessor for the year of reappraisal is generally used for the intervening year also. The actual value of real property is based on its value as of the appraisal date, which is June 30 of the year prior to the reappraisal year.

Three Approaches to Value 
The three approaches for appraising property are the cost approach, the income approach, and the market approach. To appraise property using these methods, the Assessor and staff must review information gathered on individual properties, know what similar properties are selling for, and how much it would cost for replacement. Other factors that influence value may be location, availability of services, and rental rates.

  • Market Approach
    The market approach is the most direct method of appraisal. Market value is the most probable price, expressed in terms of money, that a property would bring if exposed for sale in the open market in an arm’s length transaction between a willing seller and willing buyer, both of whom are knowledgeable concerning all the uses to which it is adapted and for which it is capable of being used. Residential properties, by law, must be valued solely by the market approach, using comparable verified sales from the study period.
  • Cost Approach
    The cost approach estimates the material and labor costs to replace a building with a similar one. If the building is not new, the appraisal must consider its age and how much it has depreciated over time.
  • Income Approach
    The income approach may be considered for income producing properties such as stores, office buildings, and warehouses. This method considers the landlord’s income and operating expenses, and the financial return most people would expect from a given type of investment property.

Physical changes in your property
A property’s value may alter over time due to physical changes, such as new rooms finished in the basement or extensive remodeling and modernization. Changes made to maintain your property’s current value, such as painting your home, replacing your roof or making repairs would not necessarily increase the value of the property. But, if these tasks were not performed, the condition of the home would deteriorate which could adversely affect the value.

Equitable Assessments Are Part of the Valuation Process

Uniformity of Assessment
After properties have been appraised, the values are analyzed to ensure accurate and equitable assessments. Colorado law requires all assessors to value property at a specific level and within certain uniformity standards. This provides equity in distribution of state school funding, local tax burden, and assessments that cross county lines. To ensure proper levels and uniformity standards are being followed by the Assessor, an independent auditor, contracted by the Legislative Council, conducts an annual 1 percent study of all property in each county. Findings of the annual study are reported to the State Board of Equalization each year.

Certification of Assessed Value to Taxing Authorities
In August of each year, the Assessor certifies the total assessed value of all properties located within the boundaries of each taxing authority. Assessed values are calculated by multiplying the actual value by 29 percent for all property except residential. The residential assessment percentage is subject to change by the Colorado legislature each odd numbered year. By constitutional mandate, the change in percentage maintains the present balance of the tax burden between residential and all other properties. The current residential assessment rate is 7.15 percent. These figures are used by the taxing authorities to determine their mill levies. If there is any change in the assessed value due to Board of Assessment Appeal decisions, abatements or any other reason, these values are re-certified to the affected taxing authorities in early December to provide the most current figures for their calculations.