Colorado legislators faced many challenges this year as they tried to balance the state budget. Projections showed shortfalls at more than $600,000,000 for the fiscal year July 1, 2017 to June 30, 2018. Other looming considerations included all of the possible federal changes that might be putting more responsibilities on state government such as changes to the Medicaid program, transportation and education.
Since the early 2000’s, many Colorado seniors have been able to take advantage of a small tax break if they were homeowners and had lived in their own home for more than 10 years. This program is better known as the Colorado Senior Property Tax Exemption program or sometimes called the Homestead Exemption.
The Homestead Exemption provides for a 50% reduction in the property taxes on the first $200,000 of assessed value if the senior has lived in the home for 10 years or more. Seniors who take advantage of this tax exemption realize an annual reduction in their property taxes that often ranges between $600 and $1200.
Even though, the Homestead Exemption was approved by the voters as a constitutional amendment, legislators have the ability to make some changes to the program including reducing the amount of the property value that is subject to a reduced tax payment. For example, they can reduce the amount of assessed value from $200,000 to $100,000 resulting in a decrease in the amount of the exemption and an increase in the amount that the older adults pays in property taxOver the years, numerous bills have been introduced in the legislature to change the program. Currently, it costs the state almost $150 million to fully fund the program. During the 2008 housing bust, the legislature did reduce the benefit to zero, but as the economy recovered, the legislature approved fully funding the Homestead Exemption.
Advocates for seniors were concerned in the last legislative session the program might again see major reductions given the size of the budget challenges. Governor John Hickenlooper’s budget included reductions in the Homestead Exemption.
Through the efforts of senior advocates and taxpayers who shared their concerns with their legislators of not fully funding the program, the Homestead Exemption was fully funded for Fiscal Year 2017-18. Several legislators have indicated they would be working over the summer to find ways to consider changes to the Homestead Exemption.
The increased property values of real estate in Colorado for older adults who are on fixed incomes makes the Homestead Exemption important to many property owners. While the current statute has limitations such as a) lack of transferability if a homeowner moves to another house and has not lived there for 10 years; b) available to all homeowners who meet the age and residency requirements, regardless of income; and c) not available to renters. The current program continues to help thousands of Coloradoans each year to pay their property taxes.
Homeowners who wish to take advantage of the Homestead Exemption must file a form with the County Assessor’s office before July 1. Property owners who sign up before July 1, 2017 will realize the reduction on the 2017 property taxes paid in 2018. Property owners only need to sign up once with the County Assessor’s Office.
For more information or help to sign up for the Homestead Exemption, call 303-333-3482.
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