Amid rising property tax concerns, Colorado lawmakers and the governor have reached an agreement to provide relief. This new property tax relief initiative, if enacted into law, will lower assessment rates for commercial properties and reduce valuations for homeowners.
Details of the New Property Tax Relief in Colorado
The agreement on the new property tax relief, known as Senate Bill 233, was announced recently by the governor, legislators, and business leaders. This proposal comes just before the close of Colorado’s 2024 legislative session, leaving the minimum time necessary for it to be passed into law.
The governor’s office, lawmakers, and interest groups have been collaborating with Colorado Concern, a non-profit representing state CEOs, to develop this agreement. Colorado Concern has been advocating for even greater tax breaks and continues to work on expanding this relief.
“This agreement may not satisfy everyone, but the strong bipartisan support shows that it addresses the core issue,” the governor remarked, commending the bill’s sponsors.
Under the proposed legislation, the commercial tax rate would drop to 25% (from 29%) over three years. Additionally, there would be two residential tax rates: 7.15% for schools and 6.95% for other local governments.
The bill also allows homeowners to deduct 10%, up to $70,000, from their home’s value for tax purposes. Furthermore, it caps the increase in property tax revenue at 5.5%, though schools, home-rule cities, and certain special districts’ debts would be exempt from this cap.
Supporters of this property tax relief argue that it will provide immediate financial assistance, promote economic growth, and stabilize local communities.
Funding the Tax Relief
In its first year, the tax relief is expected to reduce taxes by approximately $1.3 billion, marking the largest property tax reduction in two decades. Advocates emphasize that this tax cut will not strain the state budget or lead to additional debt for K-12 education.
However, the complete funding source for the tax cuts remains uncertain. Some funding will come from the state education fund and general fund dollars, but lawmakers will need to reconvene to secure the remaining funds.
With Colorado’s legislative session ending soon, there is little time left to pass this relief measure. Given the bipartisan support, the bill’s chances of becoming law appear promising.