Budgeting for Your Property Tax Increase

So, you’ve received your property value assessment, and it seems probable that your property taxes will be going up. However, you may be wondering about the extent of the increase and how to effectively prepare for it.

During our research to assist you, we discovered the intricate nature of the system. Every county has its own website with varying levels of information. Additionally, the mill rate, which determines property taxes, differs for each property, adding to the complexity.

Three mini aneurysms and fifteen laptop slams later, we were able to simplify the process to guide you in calculating the impact of these changes on your budget and help you plan accordingly to maintain financial stability.

Calculate Your Tax Increase:
Step 1: Search for your property on your county accessor’s website.
Adams County
Arapahoe County
Broomfield County
Denver County
Douglas County
El Paso County
Jefferson County

Step 2: Locate your property’s assessed value, mill levy, and 2023 taxes.

Step 3: Convert your mill levy rate to a decimal value.
A mill is equal to 1/1000 of a dollar, thus 98.42 mills = .09842

Step 4: Calculate your estimated 2024 property taxes.
Assessed Value x Mill Levy = 2024 Property Taxes

Step 5: Calculate your estimated monthly tax increase.
2024 Property Taxes – 2023 Property Taxes = Your Tax Increase
Your Tax Increase / 12 = Your Increase in Monthly Mortgage Payments

Adjust Your Budget:
Once you have a (somewhat) clear understanding of your property tax increase, it’s time to adjust your budget accordingly. Evaluate your income, expenses, and financial goals to make necessary adjustments. Identify areas where you can reduce discretionary spending or find cost-saving opportunities.

Creating a separate category in your budget specifically for property taxes and setting aside a portion of your monthly income in a dedicated account will help you allocate funds more effectively and avoid financial strain. By accumulating these funds over time, you’ll be better prepared to meet increased tax obligations whenever they arise.

Explore Tax Assistance Programs:
Colorado offers various tax assistance programs designed to help homeowners with limited income or other qualifying criteria. Research the following options and determine if you qualify for programs like the Senior Homestead Exemption, Disabled Veterans Exemption, or Property Tax/Rent/Heat Rebate. These programs can provide valuable relief and help you manage the increased tax burden.

Let’s look at the bright side; your investment is increasing in value! You will be in an optimal position once it’s time to upgrade or cash out. However, this also entails an increase in your monthly mortgage payment. This adjustment can pose a significant financial challenge for individuals striving to navigate through a recession. Nevertheless, by comprehending these altered expenses and skillfully handling your finances, you can maintain stability while your investment continues to grow.