Why Many Colorado Homeowners Should Expect Higher Property Taxes in 2026 — Even Without Rising Home Values
Many Colorado homeowners are opening their assessment notices and asking the same question: How can my property taxes be going up when my home value hasn’t changed much at all?
For 2026, the answer has far less to do with market appreciation and far more to do with state-level tax policy changes that are now fully taking effect.
According to a 2024 report from the Common Sense Institute of Colorado, most homeowners across the state should expect property tax bills to rise by roughly 20–25% in 2026, even if home prices have remained relatively flat. Here’s why.
1. Pandemic-Era Tax Relief Is Expiring
During the years immediately following the pandemic, Colorado lawmakers enacted temporary property tax relief measures to cushion homeowners from rapid increases in assessed values.
For the 2024 tax year, homeowners benefited from:
- A temporarily reduced residential assessment rate of approximately 5.7%, and
- A $55,000 subtraction from the taxable value of primary residences.
These measures helped suppress tax bills at a time when property values were rising quickly. However, they were never intended to be permanent.
As of the 2025 tax year (payable in 2026), those temporary discounts have expired.
2. A New, Higher Permanent Assessment Rate Structure
Following the repeal of the Gallagher Amendment in 2020, Colorado lost the mechanism that historically kept residential assessment rates artificially low. Since then, lawmakers have been working to rebalance the system.
A bipartisan agreement negotiated during a 2023 special legislative session — and finalized through Senate Bill 24‑233 and House Bill 24‑1001 — created a new split-rate assessment structure:
2025 Assessment Rates (Payable in 2026)
- 7.05% for school district taxes
- 6.25% for local government taxes
This structure replaces the lower, temporary 2024 rate and represents a meaningful increase in the portion of your home’s value that is subject to taxation.
Even if your home’s market value has not increased, the taxable percentage of that value has.
3. Why a 25% Increase Is Common — Even With Flat Prices
Property taxes are calculated using three primary components:
- Market value of the property
- Assessment rate (set by the state)
- Mill levies (set by local taxing authorities)
While home price growth has slowed significantly across much of Colorado — especially in mountain and resort communities — the assessment rate jump alone is enough to drive substantial increases.
For many homeowners, moving from a ~5.7% temporary rate in 2024 to a blended effective rate closer to 6.25–7.05% translates to a 20–25% higher tax bill, before any mill levy changes are factored in.
This is why homeowners are seeing higher taxes despite relatively stagnant home values.
4. Local Factors Can Push Bills Even Higher
In addition to state-level changes, local dynamics can amplify the increase:
- School district mill levies often account for the largest portion of property tax bills, and many districts have approved bonds or overrides.
- Overlapping taxing districts (county, town, fire, recreation, special districts) mean tax bills can vary significantly from one neighborhood to the next.
- In mountain communities like Summit County, assessed values remain high even when price growth cools, compounding the effect of higher rates.
As a result, two homes with similar values can see very different tax outcomes depending on location.
5. What About 2026 Assessment Rates?
Looking ahead to the 2026 tax year, the residential assessment rate for the local government portion is expected to rise to 6.8%.
However, House Bill 24‑1001 introduces a new mitigation tool:
- Homeowners will subtract approximately 10% of their home’s value, up to $70,000, before applying the assessment rate.
With this subtraction, the effective assessment rate for many average-priced homes is projected to be closer to 6.4%, slightly reducing the impact — but still well above the temporary pandemic-era rate.
6. Historical Context Matters
Even with these increases, Colorado’s property taxes remain low compared to much of the country:
- Colorado average effective rate: ~0.49%
- National average: ~0.90%
That said, homeowners who became accustomed to years of declining or flat assessment rates under Gallagher are now experiencing a structural reset — and that adjustment feels abrupt.
Bottom Line
If you are facing a 25% increase in property taxes in 2026, it is not because your home suddenly became more valuable.
It is primarily the result of:
- The expiration of temporary pandemic-era tax relief
- The implementation of higher permanent assessment rates
- School district and local mill levy impacts
- Long-term policy shifts following the repeal of the Gallagher Amendment
Understanding these changes is essential — especially for homeowners budgeting long-term or considering a future move.
If you have questions about how property taxes affect your home’s overall cost of ownership, or how these changes may influence future market dynamics, I’m always happy to be a resource.
