25 September 2009

Colorado's Property Taxes Are Below Average

While the Census Bureau is not the most accurate source of property tax information, because people often inaccurately report information to it, it has a lot of information on the topic, which the Tax Foundation has collected in a convenient set of documents. The documents also collect interesting information such as the median income of homeowners, something that is higher than the median income of the general population, and median home value data.

Colorado ranks 30th in dollars of property taxes paid per household, 38th in property taxes on homes as a percentage of home value, and 37th in property taxes on homes as a percentage of income.

These statistics understate the importance of property taxes in the Colorado tax base, however, because Colorado's state constitution mandates that Colorado value homes at a lower share of fair market value than the value it assigns to other property. (Some accuracy is lost in this summary as I am intentionally avoiding using the precise property tax terms under state law in this post.)


Michael Malak said...

Colorado property taxes are 1/4 what they are in the Washington, DC area. The tax rates are half -- about 50 cents (per $100) here, and about $1.00 there. Property values are half here than there. The house I live in here in West Washington Park is equivalent to a house in Cleveland Park, Washington, DC that I could never have afforded.

These two factors taken together, Colorado property taxes are 1/4 what they are in the Washington, DC area.

Property taxes are so high there that no one can afford to retire in place. Often, property taxes there are greater than the principal and interest of 30-year-fixed mortgage payments from mortgages made 30 years ago -- even after adjusting for inflation. At that point, there really is no concept of private property.

Andrew Oh-Willeke said...

Property taxes are among the most ancient. They probably go back to the Bronze Age, at least.

I don't recall any U.S. jurisdictions without them, although I'm sure that could simply be pre-coffee morning fuzz.

Hence, I doubt your sugestion that there is no concept of private property. There are some key evolutions under way (some in IP, some in the evolving interaction of land use law and traditional property rights), but the concept is alive and well.

Indeed, it is notable that in the greatest wave of repos and foreclosures since the Great Depression, that doubts about the fairness of the foreclosure system are coming up only at the edges (e.g. when a person current on rent or HOA fees ends up losing property to collective misdeeds, and when there are indica of fraud in the underlying mortgage deals).

Michael Malak said...

Wikipedia has a good article on allodial title and the few pockets in the U.S. where it exists.


I'm actually not that much of a libertarian extermist to equate private property with allodial title. But in my mind, Denver's property tax rates preserve the concept of private property, and Fairfax County's destroy it.