Trying to make sense of Denver property taxes before you buy? You are not alone. Taxes can change what you can afford each month and affect your cash-to-close. The good news is that Colorado’s system follows a clear formula once you know the pieces. In this guide, you will learn how taxes are calculated, what mill levies mean, how escrow works with your mortgage, and what to check during your purchase. Let’s dive in.
How Colorado property taxes work
Key terms you need
- Market value: The county’s estimate of your home’s full value.
- Assessment rate: A statewide percentage set by property class, applied to market value to get assessed value.
- Assessed value: Market value × assessment rate.
- Mill levy: The tax rate from each taxing district, added together. One mill equals $1 of tax per $1,000 of assessed value.
The simple formula
- Annual tax = Assessed value × (Total mills ÷ 1,000)
- Or, Annual tax = (Market value × Assessment rate) × (Total mills ÷ 1,000)
Assessment rates are set at the state level by property class, while mill levies are local. The county assessor determines market value and publishes valuation notices. The county treasurer issues the tax bill based on the combined mills from all taxing jurisdictions.
A quick illustration
Here is a hypothetical example to show the math:
- Market value: $500,000
- Sample residential assessment rate: 7.15%
- Total mill levy: 75 mills
- Assessed value = $500,000 × 7.15% = $35,750
- Annual tax = $35,750 × (75 ÷ 1,000) = $2,681.25
Always confirm the current assessment rate and the parcel’s exact mills with the county assessor before relying on any estimate.
Mill levies in Denver
What composes your total mills
Your total mill levy is the sum of several local pieces that can vary by address:
- County mill levy
- City or municipal mill levy
- School district mills, including bonds or overrides
- Special districts, such as fire, water, sanitation, library, parks, transportation, or metropolitan districts
Why bills differ around the Front Range
The residential assessment rate is statewide. What changes your bill from one area to another are:
- Different market values, which influence assessed value
- Different total mills set by local taxing authorities
- Special districts that add mills in some areas and not others
- Voter-approved bonds or mill overrides for schools or infrastructure
Denver specifics to verify
Denver is a consolidated city and county. Many homes are only subject to Denver and school district mills, though special districts may still apply to certain parcels. Two similar-priced homes in different Front Range communities can have very different tax bills if one sits inside a metro district or a higher-tax school district. Always check the exact taxing districts for the property you are considering.
Budgeting and escrow for Denver buyers
Estimate your annual line item
- Start with the last tax bill or the assessor’s current value and apply the formula.
- To compare across neighborhoods, calculate an effective tax rate: last year’s tax bill ÷ current market value. This helps you compare apples to apples.
- Plan for reassessment. If market values rise, tax bills can increase even if the assessment rate and mills do not change.
How mortgage escrow works
- Most lenders collect 1/12 of the estimated annual taxes each month into an escrow account.
- Lenders also keep a cushion to cover increases.
- If taxes go up after closing or if the initial estimate was low, you could see an escrow shortage. The servicer may require a lump-sum payment or raise your monthly escrow.
- Paying cash? You will receive the tax bill directly and must budget for the full installments.
Closing, proration, and other charges
- Property taxes are typically prorated between buyer and seller at closing based on local practice. Ask how proration is calculated for your Denver transaction and which year it refers to.
- Some charges are not part of general property taxes. Special assessments may be collected up front or recorded as liens. Confirm whether any municipal or district assessments will transfer with the property.
Due diligence checklist during your purchase
Documents to request
- Current year’s property tax bill
- Tax bills for the past 3–5 years
- Assessor’s valuation notice and any exemptions shown
- Tax parcel ID and legal description
- Disclosure of any pending or recent valuation appeals
- Information on special assessments, HOA tax-like charges, or metro district obligations
Questions to ask early
- Is the property inside any special district boundaries? What are the current mills for each?
- Has the property been recently reassessed? Any appeals pending?
- Are there pending bond measures or mill override elections that could add mills?
- Are any exemptions applied to this parcel and do they transfer?
- How will taxes be prorated at closing in Denver for this transaction?
If you disagree with value
If you believe the assessed value is off, contact the county assessor for an informal review and learn the steps to a formal protest. Bring recent comparable sales and details that affect value or condition.
Anticipate changes after you buy
- Voter-approved bonds or mill overrides can add mills in future years.
- New construction, renovations, or changes in use can raise market value and your bill.
- Market shifts can raise or reduce assessed values at reassessment time.
Where to verify rates and deadlines
- Colorado Department of Local Affairs, Division of Property Taxation: for statewide assessment-rate tables and policy guidance.
- Denver Assessor: for parcel lookups, valuation notices, and appeal procedures.
- Denver Treasurer: for tax bills, payment schedules, installment options, and lien information.
- Clerk and Recorder: to research recorded district or bond documents if needed.
- School district finance pages: for information about school mills and bonds.
- County parcel or GIS maps: to see which taxing districts cover a specific address.
If you are estimating a specific home, confirm the current assessment rate and the parcel’s combined mill levy with the county assessor or the state’s Division of Property Taxation. Contact the Denver Assessor and the Denver Treasurer for parcel-specific questions and exact payment deadlines.
Ready to run the numbers on a home you love or compare neighborhoods across the Front Range? Reach out to Lauren Trent for clear guidance and a no-drama plan from offer to close.
FAQs
What is a mill levy in Denver property taxes?
- A mill levy is the tax rate from each local taxing district; the total mills for all districts are added and applied to your assessed value to calculate your annual bill.
How can I estimate my Denver property tax bill before I buy?
- Use the formula: (Market value × assessment rate) × (Total mills ÷ 1,000), then confirm the current assessment rate and your parcel’s exact mills with the county assessor.
Why do two similar-priced homes around Denver have different taxes?
- Differences usually come from total mills and special districts, plus school district mills; even with the same assessment rate, these local factors change the final bill.
Will my Denver property taxes go up after purchase?
- They can if market values rise at reassessment, voters approve new mills, or you make improvements that increase market value.
How are Denver property taxes handled at closing for buyers?
- Taxes are typically prorated between buyer and seller based on local convention; ask your closing officer how proration is calculated and which year it references.
