Proposition HH Election Update
Last week, the statewide ballot measure Proposition HH was defeated with about 60% of the electorate voting against it. The Colorado Association of REALTORS® (CAR), came out in opposition to Proposition HH in September. In evaluating Prop HH, CAR completed a comprehensive process that included polling; hearing directly from campaigns supporting, opposing, and educating on Prop HH; reviewing the Blue Book content and analysis from non-partisan legislative staff; as well as extensive discussion and debate among members. Following this process, our association concluded that Prop HH was simply not the answer and that Coloradans deserved better.
Within Prop HH, the only components that required voter approval were to increase the state revenue cap by 1% and allow the state to keep TABOR refunds. CAR highlighted from the start how more than 800,000 renting households, or approximately 2 million Coloradans, wouldn’t receive any property tax relief from Prop HH, but would have likely lost their TABOR refunds. Less money in renters’ pockets is less money to put towards homeownership or to make ends’ meet.
With Prop HH failing, what does this mean for property owners and the real estate industry?
Whereas Prop HH would have created new subclasses of residential property, current law remains with simply “Residential” and “Multi-family Residential” classifications. The assessment rate for 2023 will continue at 6.765% after a $15,000 reduction in market value. For 2024, the assessment rate will go up to 6.976% for Residential and 6.8% for Multi-family. Starting in 2025, the assessment rate will be 7.15% for both residential classifications.
For Commercial property, the assessment rate will remain 27.90% in 2023 and will be 29% starting in 2024.
For seniors, the current Homestead Exemption remains in place, mandating that a property owner must be at least 65 years old and have owned and occupied the property as their primary residence for at least 10 years.
What can we expect going forward related to property taxes?
- CAR will continue to advocate for portability of the Homestead Exemption for seniors. Seniors should be able to move without penalty of losing their Homestead Exemption. This change does not require voter approval and can be enacted by the Legislature during the 2024 legislative session.
- We have heard from Senate leadership to expect legislation that will differentiate between residential properties, similar to what was in Prop HH for “primary or owner-occupied residences.” This also does not require voter approval and is something CAR’s Legislative Policy Committee (LPC) can expect to tackle in 2024.
- We are already seeing this in relation to Short-Term Rentals (STRs). There will be a bill coming in 2024 to assess properties at the commercial lodging rate of 27.90% if that property is used for more than 90 nights as an STR.
A Special Session on Property Taxes Will Convene on November 17
“We applaud the Governor and our state lawmakers for coming together this week in a special session to address the critical and growing issues surrounding property taxes and their impact on homeownership and accessibility,” said CAR Vice President of Public Policy Brian Tanner. “The Colorado Association of REALTORS· and its more than 28,000 members across the state are eager to see our state leaders focus their sites on meaningful property tax relief and solutions that do not redefine or reclassify property types at varying rates. It’s critical that we work to protect all of the state’s residents and provide solutions that will continue to foster investment in real estate across Colorado.”
We’ll Continue to Work for You In the last year alone, CAR tracked and took positions on more than 85 bills out of the 617 introduced. As we head into 2024, we’ll continue to advocate for you and your business at the state capitol. If you have any questions related to Proposition HH or property taxes, please contact us at[email protected].