I’ll Say It Again: The Mill Levy Should
The dollar amount of property taxes has always been a data field on the MLS, because buyers need to know how much they should expect to pay if they purchase a listing. But that number does not provide context to the home buyer. In other words, how do the taxes for this home compare with the taxes for a home of the same value nearby, across town, or elsewhere in the metro area? The answer is in the mill levy.
A few years ago, REcolorado (the Denver MLS) and other MLSs added a “yes/no” field for metropolitan tax district, but how much does that tax district add to the property taxes for that listing? MLS listings don’t currently have a data field for mill levy.
some counties, including Denver, just give the total mill levy and don’t, as far as I could tell, indicate how much of that mill levy is from a metro tax district.
Be a Required Field on MLS Listings
valuing the home. That cost is literally hidden from the buyer of a home in any metropolitan tax district.
signs to each parcel.
Some metro districts have a zero mill levy, but some metro tax districts have mill levies so high that they double the tax bill for a home compared to a comparable one nearby that is not in that tax district.
A good broker should let a buyer know the premium he or she is paying to buy a home in such a district, but that broker cannot currently get that information from the MLS listing. The broker would have to go to the assessor’s web page for that listing in the county where that home is located and look at the breakdown of mill levies for that house.
Jefferson County provides the breakdown of mill levies by each taxing jurisdiction, but
An example of how much taxes can vary can be found in two Jeffco homes that sold in the last few months. One house in the Mesa Meadows section of Golden which sold for $1,500,000 has a mill levy of 91, like all homes in the City of Golden, which has no metro tax districts. The tax bill for that home is $6,761. Meanwhile, a house three miles to the north in a metro tax district which sold for $972,500 has a mill levy of 165, resulting in a 2024 tax bill of $10,105, a $3,344 difference.
A metropolitan tax district is created to fund the infrastructure (roads, gutters, sewers, water lines, sidewalks, etc.) for a new subdivision. Instead of the developer paying those costs, a bond issue provides the funds for that purpose, and home buyers in that subdivision will be paying an extra mill levy for two or more decades to pay off those bonds.
In the above example, the metro tax district’s mill levy is 70 mills. The owner of that home will pay $100,000 or more over time for the infrastructure costs. In Golden, those costs were paid for by the developer or the city. Yet, an appraiser or real estate broker would not factor that long-term expense when
Does a Seller Say They Won’t Repair Anything?
Every buyer should hire a professional inspector, even if a home is sold “as-is.” That’s a bogus term intended to convey that the seller won’t correct any defects uncovered by the buyer’s inspector. I call it “bogus,” however, because the contract does or should contain an inspection termination deadline, and, even if it doesn’t, the buyer always retains the right to inspect the property.
If your inspector finds a serious issue, you can threaten to terminate because of it, and it’s likely the seller will agree to deal with it rather than lose the contract and start over, in which case he must disclose the newly found issue to the next buyer.
That being said, the seller could still call the buyer’s bluff, especially if the buyer’s agent has given the listing agent the impression that the buyer loves the house and would
not let a few thousand dollars in repairs stand in the way of getting a house they love.
That was the situation with a listing of mine. I had been told that the buyer lost out on a prior listing, and their offer had a clause saying they would beat any competing offer by $5,000. That won them the contract, but my seller (who met the buyers a couple times during showings and inspection) knew how much the buyer loved the property and wouldn’t want to lose it.
Therefore, when the inspection objection included a demand for a 5-figure concession to fix a major health and safety problem that any other seller would have agreed to fix, my seller refused, and the demand was withdrawn.
Remember: getting under contract is only the beginning; inspection is a negotiation, too.
When an appraiser or real estate broker values a home, they look at square footage, lot size, garage, bedrooms/bathrooms — in other words, everything but the tax rate (and the HOA dues) when doing an appraisal or comparative market analysis. Yet, the bottom line cost of owning homes in a metropolitan tax district can be dramatically higher.
That is why I have argued for over a decade that REcolorado should include the mill levy for each listing and not just the dollar amount of the property taxes.
Some counties make it easier than others to find the mill levy. In Jefferson County, the assessor’s website breaks down the mill levy from every taxing jurisdiction. A link provides the dollar subtotals and total.
You can, however, calculate the tax bill from the assessor’s website by multiplying the mill levy by the assessed valuation of the property. The assessed valuation for residential real estate statewide is currently 7.15% of the “full valuation” which the assessor as-
When you purchase a home that is within a homeowner’s association, state law requires that you receive a wide array of documents, financial and otherwise, about that association.
These include, for example, the covenants, the rules and regulations, financial statements, bylaws, budget, reserve study, the minutes of the last six months of board meetings, and the minutes of the most recent annual membership meeting.
The contract to buy and sell a home in Colorado provides deadlines for providing these association documents, objecting to them, and resolving any objections. A buyer can terminate a contract and get the earnest money deposit refunded if he or she is unhappy with what those documents reveal.
For example, the reserves of the association may be insufficient, suggesting that a special assessment is likely. The minutes might reveal issues which are upsetting to some members, or legal action which the association is undertaking, at some expense, to enforce its rules against one or more members. These and other reasons could exist that might cause the buyer to terminate the contract.
Very few listing brokers make those documents available to prospective buyers in ad-
Thus, if your home has a full valuation of $1,000,000, the assessed valuation would be $71,500. That’s the number against which the mill levy is calculated. A mill levy of 100 would compute to a property tax bill of $7,150. It’s called a “mill” levy (from the Latin word for thousand) because it is levied against each thousand dollars of value. Thus, 100 mills x 71.5 = $7,150.
The math becomes complicated when the state legislature says, as it did last year, that $55,000 should be subtracted from the full valuation before calculating the assessed valuation. How much did that reduce taxes? $55,000 of reduced full valuation is worth $3,932.50 in reduced assessed valuation. At 100 mills, that’s worth about $393.25 off the home’s tax bill.
Although giving the total mill levy for each MLS listing would be a great improvement, the best way to inform buyers of the effect of a metropolitan tax district would be to say that there is such a tax district, and to add a separate field to enter the number of mills for that tax district.
vance of going under contract, but why not?
Recently, at an open house, a visitor told our broker associate that in California the questions he was asking about the HOA (such as why the HOA dues are so high) would be readily ascertainable in advance rather than only after going under contract.
When we have been on the buyer side, we have rarely found that a listing agent already has the HOA documents — and answers to important HOA questions — to provide us. That got us thinking, and the answer came last week when Pam Giarratano, our sales rep at First Integrity Title, brought to our office meeting Julietta Voronaov from Rexera. For a reasonable fee, Rexera provides all those required HOA documents prior to going on the MLS, so we can provide them to interested buyers and their agents.
Currently Rexera’s service is only available through our preferred title company, First Integrity Title. After Julietta’s presentation, our broker associates and I agreed that from now on, when we list a property that is located in an HOA, we will use First Integrity and order the pre-listing package from Rexera. We look forward to providing complete HOA information in advance from now on for all our listings that are located in a homeowner’s association.
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