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 the appropriate assessment rate. For tax year 2023, the assessment rate for residences is 6.70%, commercial 27.90%, renewable energy & agricultural property 26.4%. The assessment percentages are subject to change by the Colorado legislature. 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.

History of Agricultural Land Valuation

Colorado Constitution and statutes prescribe that the actual value of agricultural lands, exclusive of buildings, shall be determined by consideration of the earning or productive capacity of the land over a reasonable time period. These earnings are capitalized into actual value.

In 1969, individuals representing the agricultural community met with the Colorado Tax Commission (now called the Division of Property Taxation) to establish criteria to carry out the law. They agreed upon the following provisions:

• Earning or productive capacity would be determined by measuring the landlord’s net income.
• A reasonable time period would be the current ten-year average.

The State Board of Equalization approved these provisions. Colorado assessors have used them since 1970. A constitutional amendment passed by the electorate in 1982 preserves the production formula approach to value.

Agricultural Land Definition

Colorado Revised Statutes defines agricultural land as one of the following:

• A parcel of land, whether located in an incorporated or unincorporated area, and despite the uses for which such land is zoned, that was used the previous two years and presently is used as a farm or ranch or being restored through conservation practices. The conservation practice must be a plan under the Conservation Reserve Program (CRP) or a plan approved by an appropriate conservation district.
• A parcel of land that has at least 40 acres of forest land with a forest management plan. The land must be used to produce tangible wood products that originate from the productivity of the land for the primary purpose of obtaining a monetary profit.
• A parcel of land that consists of at least 80 acres, or of less than 80 acres if such parcel does not contain any residential improvements, and that is subject to a perpetual conservation easement, if such land was classified by the Assessor as agricultural land at the time such easement was granted, if the grant of the easement was to a qualified organization, if the easement was granted exclusively for conservation purposes, and if all current and contemplated future uses of the land are described in the conservation easement. "Agricultural land" does not include any portion of such land that is actually used for nonagricultural commercial or residential purposes.

Agricultural Terms

• Farm - A parcel of land that is used to produce agricultural products that originate from the land’s productivity for the primary use of obtaining a monetary profit; i.e., crops have been raised, harvested, and or sold.
• Ranch - A parcel of land that is used for grazing livestock for the primary purpose of obtaining a monetary profit.
• Livestock - Domestic animals that are used for food for human or animal consumption, breeding, draft, or profit.
• Improvements - Improvements are all structures, buildings, fixtures, fences, and water rights attached to the land. Homes and buildings are appraised and valued separately from the land. Water rights, fences, windmills and sprinklers are improvements that are appraised and valued as a unit with the land.

The County Assessor and You

Assessment Date

Colorado law states that January 1 is the assessment date. The assessor determines the current use and value of the property as of January 1 of each year. All buildings or improvements constructed before this date will be taxed.

Assessor’s Role

Because the method for valuing agricultural land is based on production, the Assessor must periodically review the land to verify the continued use for agricultural purposes. To ensure your property is classified properly, the Assessor may request additional information from you. This information could be a copy of your previous year’s income tax form (1040-F), a grazing lease, or an agricultural land classification questionnaire. The Assessor may also conduct a physical inspection of your land. However, the classification of your property will not be based solely on the information you supply on the questionnaire and all responses will be treated as confidential information.

Agricultural Property Owner’s Role

Once classified as agricultural land for valuation purposes, the Assessor must verify typical crop yields and expenses of the landlord. You may also be asked to provide additional information from your farm records.

Valuation of Irrigated or Dry Farm Land

The steps in the valuation of irrigated or dry farmland are as follows:

• Determine the basic crops raised and the cropping practices used in each farming area.
• Establish the appropriate ten-year average yield for each crop in each farming area.
• Determine the landlord’s share of each basic crop.
• Establish the typical landlord expenses in each farming area.
• Calculate the landlord’s net income.
• Determine the actual value by dividing the landlord’s net income by the statutory 13 percent capitalization rate.
• For assessment purposes, the assessed value is calculated by multiplying the actual value by the statutory assessment rate of 26.4 percent.

Ditches, canals, flumes and sprinkler systems owned and used by individuals for irrigating land that is owned by the same individuals, are not taxed separately from the land while they are owned and used exclusively for such purposes.

Valuation of Grazing or Meadow Hay Land

The steps in the valuation of grazing or meadow hay land are as follows:

• Classify the land according to the carrying capacity for the appropriate ten-year period. Meadow hay land is uncultivated land devoted to forage production, but may be sub-irrigated.
• Determine the gross income of the landlord based on the average Animal Unit Month (AUM) rent over the appropriate ten-year period. The AUM rental rate researched by the Division of Property Taxation is multiplied by the number of acres per AUM to get the gross income.
• Deduct the appropriate expenses from the gross income to get the landlord’s net income. These expenses are water and fence expenses and are deducted only if they are typical ten-year average expenses to the landlord. The Division of Property Taxation researches these expenses.
• Determine the actual value by dividing the landlord’s net income by the statutory 13 percent capitalization rate.
• For assessment purposes, the assessed value is calculated by multiplying the actual value by the statutory assessment rate of 26.4 percent.

Valuation of Forest Land

In 1990, new legislation amended the definition of agricultural land to include forest lands. A summary of this inclusion can be found in the section "Agricultural Land Definition". According to the statutes, all forest land eligible for agricultural land classification will be determined by the Colorado State Forest Service, upon meeting these conditions:

• The property must be described and appear on the report submitted to the Assessor by the Colorado State Forest Service on March 1.
• The property cannot already be classified as a farm or ranch under the statutory definitions of a farm or ranch.
• A forest management plan must have been prepared for the property.
• The land must produce tangible wood products that originate from the productivity of the land for the primary purpose of obtaining a monetary profit.

Forest land which has been designated as agricultural land is classified and valued the same as comparable surrounding agricultural land. If there is no agricultural land surrounding a forest land parcel, the Soil Conservation Service soil classification for the parcel is determined and valued according to similar soil types.

Other Agricultural Property

Agricultural property (agribusiness) that does not meet the definition of farm, ranch, or forest land is valued according to its use on the assessment date. The market approach is generally used to determine the value. This approach uses sales of similar properties to arrive at the estimate of value. Other agricultural property may include (but is not limited to) dairies, feedlots, hog farms, greenhouses, fur-bearing animal farms, apiaries, and mushroom farms.

Personal Property

Agricultural equipment is exempt from property taxation if it is used on the farm or ranch for planting, growing and harvesting agricultural products or for raising or breeding livestock for the primary purpose of obtaining a monetary profit. Other personal property such as livestock, livestock products, agricultural products, and supplies are also exempt from property taxation.

Valuation of Agricultural Buildings:

• Level of Value - Real property 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 that is June 30 of the year prior to the reappraisal year. Currently June 30, 2022 is the appraisal date for valuation for tax years 2023 and 2024.
• The Residence - Residences (homes) on farm, ranch or forest lands are valued using only the market approach to value. The market approach compares sales of similar properties and adjusts for the differences to arrive at the market estimate of actual value. Residential real property is assessed at a percentage of its actual value. This assessment percentage is determined by the Colorado legislature based on a study conducted by the Division of Property Taxation.

Non Integral Site Valuation

House Bill 1146 passed in 2011 and became effective for 2012 (Colorado Revised Statute 39-1-102(14.4)(a). All Colorado Assessors are mandated to examine Agricultural Classified Property with residential improvements (houses or mobile homes) and determine if the home or homes are integral to the agricultural operation. The homes must be lived in by members of the family, the ranch or farm manager or by the operator/owner and used as part of the agricultural operation.

If the use of the homes are integral to the agricultural operations, then the land under the homes will remain classified and valued as agricultural.

If the homes are found not to be integral to the agricultural operations, up to two acres of land under each home is classified and valued as residential.

Agricultural Buildings and Improvements

Agricultural buildings and improvements are valued using the appropriate consideration of the three approaches to value: cost, market and income. The market approach was discussed in the previous section.

1. The cost approach estimates the replacement cost of the building and deducts its accrued depreciation to arrive at the cost estimate of actual value.
2. The income approach capitalizes the income stream produced by the improvements into a value estimate.

To calculate the assessed value of the agricultural buildings, the actual value is multiplied by the statutory assessment percentage of 26.40 percent.

Applying for Agricultural Classification

If you believe your property is incorrectly classified and should be classified as agricultural property, you may complete a Agricultural Land Classification Questionnaire. Attach supporting documentation, and mail to the Eagle County Assessor, PO Box 449, Eagle, CO 81631. All information supplied is treated as confidential information. In order to make an informed decision on the proper classification, all information will be analyzed but the classification of your property will not be based solely on the information you supply.

An individual’s property tax bill does not necessarily correlate to the total increase in valuations or an increase in individual property valuation because:

• It is calculated as a share of the total community tax
• Each property is valued independently and differently
• Each property location has different taxing entities
• Each taxing entity has different methods of calculating their tax rate and may be subject to restrictions.

Property tax notices are prepared and sent to county property owners by the County Treasurer after January 10, 2024.

The process for assessing property taxes is established by the state of Colorado. County assessors are mandated to reappraise all properties every other year. 2023 is an appraisal year. Assessors are audited annually by the state and must conform to specific appraisal standards within the scope of each audit. 

The current reappraisal is based on sales data collected 18 to 24 months prior to June 30, 2022.

The sales data is grouped first by regional location or economic/neighborhood areas, then by property types such as vacant land, single family residential, condos, and townhomes, or by the various commercial property types such as retail, office, or lodging. Valuation models are developed for each property type within each respective economic/neighborhood area. 

The assessed value of your property is calculated as a percentage of the estimated market value of your property. This year the State has lowered the assessment percentage rates to help ease tax burdens in this inflationary time. All residential property was lowered from 6.95% to 6.70%, Agricultural from 29% to 26.4%.  All other types of property including vacant land, commercial and industrial were lowered from 29% to 27.9%.  

Furthermore, numerous taxing authorities determine property tax within Eagle County.  Each year the assessor notifies each of these 90 taxing authorities of the total assessed value of all property within the authority’s boundaries. Tax authorities are governmental bodies which provide services to taxpayers and operate in whole or part from the collection of property taxes. Examples include: counties, cities and towns, schools, metropolitan and recreation districts, libraries, fire and water districts. Each taxing authority determines their respective revenue needs (budget) annually, and then calculates their mill levy based on revenues needed for the following year. These 90 authorities combine into 367 taxing districts within Eagle County.  

The Colorado Legislature has approved a value reduction which will be subtracted from residential and commercial property. Residential property will be reduced by $55,000 and commercial will be reduced by $30,000 for 2023. While these reductions will not show up on your value notification (NOV), they will be subtracted from the actual value at the end of the year.  NOTE: Property owners cannot appeal their taxes, only their value.

Also, Senate Bill 23-108 allows all taxing entities to offer taxpayer relief through a temporary property tax credit. This legislation allows each entity to reduce the mill levy in order to reduce property tax to the property owners within their tax area. The bill also allows for those entities to recapture the previous mill levy should property value go down in the future. 

Yes. When you receive a Notice of Valuation, study it carefully as the deadlines for appeal are statutorily driven. 

If you feel the value the Assessor has placed on your property is incorrect, you may wish to inspect the Assessor’s records on your property and other properties. Records on land and buildings are public information, and you have the right to examine them. You have the right to appeal your value each year. May through June 8 of each year is set aside for the Assessor's Office to hear appeals on property valuation.

The Assessor's Office will welcome appeals of the valuation of real property from May 1 until June 8, 2024. You may submit real property appeals online.

For more information visit the Eagle County Assessor’s webpage that explains the appeals process.

Keep in mind–the assessor determines valuation, not taxes. Taxing authorities, not the assessor, determine taxes.