Introduction

Property tax revenue supports public schools, county governments, special districts, municipal governments, and junior colleges.  All of the revenue generated by property taxes stays within your county.  Property taxes do not fund any state services.

The county assessor is responsible for discovering, listing, classifying, and valuing all property in the county in accordance with state laws.  The assessor’s goal is to establish accurate values of all property located within the county, which in turn ensures that the tax burden is distributed fairly and equitably among all property owners.

Real property is revalued every odd-numbered year.  Personal property is revalued every year.  Property tax calculations consist of several components:

• property classification
• actual value of the property
• assessment rate
• assessed value
• tax rate

Property Classification

Property is classified according to its actual use on January 1.  The property’s classification determines the rate at which the property will be assessed.

Actual Value of the Property

Residential property is valued using only the market approach to value.  In this approach, the value of the subject property is based on an analysis of comparable sales.  For tax years 2011 and 2012, the comparable properties must have sold between January 1, 2009 and June 30, 2010.  However, if insufficient data existed during that time frame, data from each preceding six-month period (up to a period of five years preceding June 30, 2010) may be utilized.

Most non-residential property, including personal property, is a valued by consideration of the market approach, the cost approach, and the income approach to value.  Please refer to the brochure entitled “Property Valuation and Taxation for Business and Industry in Colorado” for additional information regarding non-residential property.

Assessment Rate

For property that is classified residential, the current assessment rate is 7.96% of market value.  The assessment rate for most other types of property, including personal property, is 29% of actual value.

Assessed Value

Multiplying the actual value by the appropriate assessment rate results in what is known as the property’s “assessed value”.

Each year county commissioners, city councils, school boards, and governing boards of special districts determine the revenue needed and allowed under the law to provide services for the following year.

Each political subdivision calculates a tax rate based on the revenue needed from property tax and the total assessed value of real and personal property located within the political subdivision’s boundaries.

All of the tax rates of the various taxing entities providing services in your tax area are added together to from the total tax rate

Public notices of budget hearings are published in the local newspaper.  The public hearings are usually scheduled in September or October.  By attending  budget hearings, taxpayers may participate in the budget process and become informed about the quality and cost of services provided in their area.

The assessor classifies and values property.  The various taxing entities determine tax rates.

Notice of Valuation

Real Property Notices of Valuation are mailed by May 1 of each year.  Personal Property Notices of Valuation are mailed by June 15 of each year.  The notices list the location, classification, the characteristics germane to value, and the actual value of the property for both the prior and current years.

The Hinsdale County Assessor may be reached at 970-944-2224.

(Please note that the above information was taken from a brochure prepared by the Division of Property Taxation Department of Local Affairs of the State of Colorado.  For additional information please visit www.dola.colorado.gov/dpt.)

The definitions below are offered in simplified language to the best of the author’s ability and are by no means to be relied upon as a legal definition of such term. These definitions are merely offered as a public service to assist you in understanding some of Colorado’s most often used water terms.  If you desire a legal definition, please contact a water attorney.

Absolute Water Right:  A Water right that has been placed to a beneficial use.  See definition for conditional water right.

Augmentation Plan:  A way for junior appropriators to obtain water supplies through terms and conditions approved by a water court that protect senior water rights from the depletions caused by the new diversions.  Typically this will involve storing junior water when in priority and releasing that water when a call comes on; purchasing stored waters from federal entities or others to release when a river call comes on; or purchasing senior irrigation water rights and changing the use of those rights to off-set the new users injury to the stream.  These plans can be very complex and it is suggested that an engineering consultant be hired to allow for proper consideration of all hydrologic and water right factors.

Beneficial Use:  Water in Colorado must be diverted for a purpose and used beneficially to get a water right.  Beneficial use is the use of a reasonable amount of water necessary to accomplish the purpose of the appropriation, without waste.  Some common types of beneficial use are:  irrigation, municipal, wildlife, recreation, mining, household use.

Change of Water Right:  Any change in the way a water right is used.  Can be change in type, place or time of use, change in point of diversion, adding points of diversion, etc.  It is not a change in use if a farmer changes the type of crop grown.  Changes of water rights must be approved by the water court to assure that no injury occurs to other water rights.

Conditional Water Right:  A right obtained through the water court which fixes the priority of the water right with a certain date, even though the appropriation has yet to be completed.  It gives the holder of that right time to complete the appropriation as long as they diligently pursue completion of the project.  Every six years the court reviews what progress has been made toward completion of the project (called “diligence”).  Once the right has been perfected by use, the holder of the conditional right must then ask the court to make it an absolute water right (see definition for absolute water right).

Exempt Well:  Small residential and livestock wells are considered to be exempt from administration.  To obtain this type of exemption, strict criteria must be met as set forth by the legislature and administered by the State Engineer.  For further information see Colorado Revised Statutes section 37-92-602.

Ground Water Commission:  A twelve-member body created by the Legislature, nine of which are appointed by the Governor to carry out and enforce the state statutes, rules and regulations, decisions, orders and policies of the Commission, dealing with designated ground water (see section of this guide titled, “How Do I Obtain a Water Well Permit Withing a Designated Basin?” for more information.

Non-Exempt Well:  A well allowed to be used for non-exempt uses.

Nontributary Ground Water

River Call:  Usually a written document filed with the Division Engineer stating that as of a certain date and time, a water right holder is not receiving all of the water they are entitled to by decree and requesting that the Division Engineer shut down (curtail) all upstream water rights junior to them until their senior right is satisfied.

Subdivision:  Or subdivided land, means any parcel of land in the State which is to be used for condominiums, apartment, or any other multiple-dwelling units, or which is divided into two or more parcels, separate interest, or in common, unless exempted.

Tributary Water:  Water that is hydrologically connected to a natural stream system either by surface or underground flows.

Water Court:  A District Court that hears matters related to water.  To obtain a judicially recognized water right, change a water right or file an Augmentation Plan, persons or entities file applications requesting with one of these courts, and the court will issue a decree or order.  There are seven water courts in the State located in each major drainage basin.

Well:  Any structure or devise used for the purpose, or with the effect, of obtaining ground water for beneficial use from an aquifer.  Additionally, any test hole or other excavation that is drilled, cored, bored, washed, fractured, driven, dug, jetted, or otherwise constructed, when the intended use of such excavation is for the location, monitoring, dewatering, observation, diversion, artificial recharge, or acquisition of ground water, or for conducting pumping equipment or aquifer tests.

This information is taken from the Colorado Division of Water Resources water terminology page at www.water.state.co.us/Home/Help/Pages/Water Terminology.aspx

What is a Transaction Broker with regard to selling and buying real estate?  Colorado Real Estate Commission Form DD 25-5-09 states:

“A transaction-broker assists the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting the parties with any contracts, including the closing of the transaction without being an agent or advocate for any of the parties.  A transaction-broker must use reasonable skill and care in the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction-broker concerning a property or a buyer’s financial ability to perform the terms of a transaction and, if a residential property, whether the buyer intends to occupy the property. No written agreement is required.”

When a house, building or other real property is bought and sold, all the parties involved want to be sure the “title” or transfer of ownership is clear.  Title insurance protects the owner and the lender against loss arising from problems connected to the title to the property.

Over the years, a home — and the land it stands on — may go through several ownership changes.  The “chain of title” describes the history of ownership, with each person or entity listed who owned the land and/or building at a particular point in time.  However, there can be unexpected problems in the chain of title that could emerge and cause trouble.  For example, there may be unpaid real estate taxes, other liens or an error in the legal description.  Title insurance covers the insured party for any claims and/or legal fees that arise out of such problems.

Title insurance is an indemnity contract between you (or your lender) and a title insurer for past defects in a chain of title.  More simply, title insurance is an agreement that, should a problem arise in the ownership records of your property, your insurer will fix the problem, defend you against it, or compensate you for any losses.  There are two basic forms of title insurance:  Owners and Lenders.

Owners’s title insurance covers your interest as owner of the property, and usually insures for the amount you paid to purchase the property.  Owning a home can be your biggest asset and an owner’s title insurance policy protects your investment.

Lenders title insurance covers your lender’s interests in your property and is usually issued in an amount equal to the loan amount.  Whenever a loan is issued for the financing of a property, the lender acquires an interest in the property for as long as the loan is outstanding.

Federal and state laws mandate that no one can require the purchase of title insurance from a specific company.

The above information is on the Colorado Department of Regulatory Agencies Division of Insurance.  For more information, please visit the DORA website by clicking here.