More than 200,000 Colorado seniors who have lived in their own homes for ten years or more and who are over age 65 take advantage of the Senior Homestead Exemption. This voter approved referendum in 2000 gives seniors a 50% exemption on the first $200,000 of residential property’s market value.
In 2002, approximately 120,000 seniors took advantage of the Homestead Exemption at a cost of $61.5 million to the state. In 2017, about 240,000 seniors are expected to take advantage of the program at a cost of $144 million to the state. Over a fifteen-year period, the program is serving about 50% more people for a little more than twice the cost to the state in 2017.
While the program is available to all seniors in the State of Colorado, the majority of households that are claiming the Homestead Exemption are valued at less than $200,000.
While a popular program with seniors, the program has been subject to more than 30 legislative measures to change it over the past fifteen years. The state legislature has the authority to change the amount of the exemption (i.e. reduce it from $200,000 to $100,000 or $200,000 to zero).
The legislature did not fund the program in 2003, 2004, 2005, 2009, 2010, and 2011. The funding was reduced because of the economic downturn in the state. Thus when the economy rebound, the legislature was able to fund the program again.
Currently policy makers are looking at reducing the amount allowed on the exemption (such as reducing the exemption from $200,000 to $100,000 of value). Other policy makers are talking about defunding the program and using the monies for other state obligations such as education and roads. Other policy makers are talking about defunding the program permanently and expanding the Property Tax/Rent/Heat Rebate program.
While all of these discussions have merit, further discussion is needed to look at the long term impact of leaving many middle income homeowners who own their own homes and have limited monthly income. For seniors to lose their homes because of inability to pay taxes or to force them to pay taxes at the expense of food and medicine is a difficult dilemma.
Seniors are subject to increased property taxes as the value of the home increases. Property taxes continue to increase annually as the value of property goes up in Colorado, especially in front range cities such as Metro Denver.
Seniors are encouraged to talk with legislators about the impact a change would have on their personal situation, as well as that of their neighbors if significant changes are made to the program.
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