Property Tax Law Updates for 2025

In September 2024, Colorado property tax law changed yet again, in what was intended to be the end of a lengthy debate over what would be considered “reasonable” tax relief for both residential and commercial property owners. The result of a special legislative session, House Bill 1001 put more stringent limits on the rates for future property tax increases.

Here are the major provisions in the new law:

• Annual growth in statewide property tax revenue will be capped at 5.5%.
• Nonresidential assessment rates will gradually lower from 29% to 25% by 2027 while agricultural property assessment rates will be 25% beginning in 2026 and remain there.
• Beginning in the 2026 property tax year, residential assessment rates are permanently set at 6.95%, calculated after a 10% deduction of the home value, up to $70,000 after adjusting for inflation.
• Exemption of revenue going to school districts, in addition to an exemption for revenues allocated to pay off voter-approved bonds.

Key Changes:

• Residential valuation rates: school districts went from 7.15% in the previous law to 7.05%.
• Residential valuation rates: local governments went from 7.15% to 6.4% (rate for homes worth up to $700,000 when factoring in a 10% exemption).
• Business valuation rates: commercial and agricultural went from 29% to 25% beginning on January 1, 2026.
• Other nonresidential property and personal property valuation rates: industrial, etc. went from 29% to 25% (27% in 2025, 26% in 2026, 25% in 2027).
• Property tax revenue cap set at 10.5% over 2 years for local governments and 12% over two years for school districts.

The residential tax rate is lower, but your tax bill may still go up.

Why? Homeowners were actually paying slightly less tax for 2024 due to temporary ballot measures that were passed that effectively reduced the assessment rate to 5.7%. Thus, with the new bill setting the assessment at 7.05%, the 2025 property tax bill will actually increase.

Additionally, these changes are based on the assumption that the statewide actual value increases do not exceed 5% in 2025. If the increase is higher, the assessment rates will be slightly adjusted.

If you have questions about taxation and how it might affect your business, contact us today for a free consultation.