CherylPixley
Property Taxes - Q & A
Questions & Answers: Get the answers on home selling and buying
| How do property taxes work? | |
| A: | Property taxes are what homeowners pay for the privilege of owning a piece of real estate. In Colorado, the tax is calculated by multiplying the "assessed value" of the property by the mill levy for the area in which the property is located. The taxes help pay for public services including roads, bridges, schools, water conservancy, fire protection and the library. |
| Q: | Are property taxes deductible? |
| A: | Property taxes on INVESTMENT real estate are usually fully deductible against current income taxes. Check with your tax professional. |
| Q: | Where can I learn more about appealing my property taxes? |
| A: | Contact the county tax assessor's office to see what procedures to follow to appeal your property tax assessment. Every spring when you receive your assessment notice you will have the opportunity to ask for a reconsideration of the value placed upon your property by the assessor. |
| Q: | How is a home's value determined by the county assessor? |
| A: |
The county assessor estimates your property's "actual value" based on sales of comparable properties that are similar to yours in location, square footage and construction quality. Then the "actual value" is multiplied by a predetermined factor to arrive at the "assessed value". |
| Q: | Are taxes on second homes deductible? |
| A: | Interest and property taxes may be deductible on a second home if you itemize. Check with your accountant or tax adviser for specifics. |
| Q: | What is an impound (or escrow) account? |
| A: | An impound account is a trust account established by the lender to hold money to pay for real estate taxes, and mortgage and homeowners insurance premiums as they are received each month. |
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