This week, Colorado voters passed Amendment B in an effort to stabilize government revenue and increase the amount of property taxes in some areas by repealing the Gallagher Amendment. This amendment to the Colorado Constitution was first passed in 1982 and required 55% of all property tax collections in the state to come from commercial properties, while 45% must come from residential properties. Because of COVID-19, state officials were forecasting that residential assessment ratios would drop to 5.88%, which could potentially lead to commercial assessment rates nearly five times higher than residential property assessment rates. Businesses could potentially pay 83% of those increased rates.
While passing Amendment B will benefit commercial properties, it may negatively impact owners in the multifamily, student housing, and senior-living industries. The assessment ratio that would typically decrease as a result of the Gallagher Amendment will now stay frozen at 7.15%.
This is a very important issue the experts at Ryan will continue to monitor, as it could greatly affect commercial and residential property owners in Colorado.
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