Property tax horizon in Gunnison Valley not looking rosy

Higher values and more mills make for rising tax bills

[  By Mark Reaman  ]

Residential property owners in the valley can expect to see a significant pop in their property taxes in the next two years. Several factors come into play including an increase in the number of mills being levied by various local districts because of new bond issues approved by voters, and more importantly, an obvious rise in the value of homes and property that has been seen throughout the valley as a COVID-related real estate boom took hold here the last couple of years.

The Gunnison County assessor’s office is charged with refiguring property valuations every two years and the latest adjustment will be based on the value of homes and land as of June 30, 2022. That change will be applied to 2023 tax bills that will be payable in 2024. Because that June 30 time period was basically the top of a recent boom in property sales and pricing throughout the valley, the tax impacts could be major. 

Looking at preliminary residential real estate price jumps since 2020 in Crested Butte of about 65%, in CB South of about 70% and in Gunnison of about 50% the impact to tax bills will not be small. 

An early high-level general estimate from Gunnison County Assessor’s Office communication’s manager William Spicer indicates that if the property tax measures on this coming November ballot (the Gunnison Watershed School District and Met Rec) are approved by voters, tax bills throughout the valley would jump noticeably. If not approved, tax bills will still rise but not at the same pace.

Taking into account some very initial assumptions about the potential mill levies that could be in play for 2023 property taxes, Spicer offered an estimated prediction for houses valued at $1 million in different areas of Gunnison County. Understanding that nothing is yet set in stone, property owners with a home valued at $1 million in Crested Butte in 2021 could see a 43% increase in tax (from about $4,933 in 2021 tax to $7,077 for 2023), while a CB South property owner with a similar $1M house could expect something in the neighborhood of a 48% increase (from $4,911 to $7,264 ) and a Gunnison property owner with a $1 million house would notice an increase of approximately 34% (from $3,706 to $4,963). If the bond issues are not approved, the increases would be less but still significant with Crested Butte seeing about a 31% increase, CB South at 36% and Gunnison at 19%.

The big hurt two years out

To be clear, those increases would not be seen on next year’s property tax bill which is for 2022 tax, but in the following year for the 2023 taxes that are payable in 2024. Without any voter approved tax measures, next year’s property tax bills might even see a slight decrease since the valuation adjustment won’t yet be in play and the state has implemented new assessment rates on both residential and commercial property. But between rising property values and new taxes approved by voters that increased the number of mills being charged to property owners, taxes are not dropping for long. Spicer noted that the total property tax revenues in Gunnison County (all taxing entities) rose from $39.1 million in 2017, to $45.5 million in 2019, to $52.2 million in 2021.

Spicer explained the county is obligated to use state regulations to relook at valuations every two years and while it appears the real estate market may now be cooling off, that will not help with the re-valuation process just getting underway. “Our current valuations are based on an appraisal date of June 30, 2020, and our new valuations will be based on an appraisal date of June 30, 2022. That particular two-year period has seen, as I’m sure you’re aware, a pretty significant upward trend in property values,” Spicer explained. “The market had already been appreciating prior to COVID, but in resort counties like here things really took off around mid-2020 and continued that way through mid-2022. With recent economic trends, especially increasing interest rates, the market may finally be starting to cool off. But any influence on sales is not going to show up until later in the year and will not be reflected in our reappraisal. By law, we can only analyze sales that occurred prior to the appraisal date. Individual increases in value will vary by area of the county and type of property, but there’s no question that most property owners can expect to see significant increases in their May 2023 Notice of Valuations.”

Spicer pointed out that there is no standard percentage change in value that gets applied to all properties or to any group of properties in the valuation process. “When we reappraise, we start from scratch and develop a new set of valuation models that reflect whatever the most recent sales have to say about the market,” he said.

Elk Avenue prices lead commercial property  

Spicer said preliminary analysis indicates vacant land has seen even steeper increases: the assessor’s office expect much of the county’s undeveloped land to see a 100% jump in value over the previous reappraisal. “On the other hand, commercial property does not appear to have kept pace,” he noted. “Average increase in the range of 20% to 30% can be expected, but individual rates will vary widely depending on location and type of commercial use. Elk Avenue, for example, has seen some very high dollar sale prices during the past two years.”

Spicer said the Assessor’s Office will be launching a new component to its website next week. The product is called Comper, and it lets users compare the value of any property to sales of similar, nearby properties. “Essentially it allows any property owner to do a comparative market analysis from the comfort of their own living room,” he said. “We’re excited to make this feature available and believe that taxpayers will find it a simple and easy-to-use tool for reviewing and understanding their 2023 valuations come May of next year.” 

Comper will be available as a link from the existing Assessor’s Property Record Search website.

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