A Colorado real estate broker is representing a buyer purchasing a newly constructed home in a master-planned community governed by a metropolitan district. The buyer is surprised to learn that the effective property tax rate appears much higher than neighboring properties in the same county that are not within the metropolitan district. Which of the following best explains this discrepancy and what the broker's obligation is?
Correct Answer
A) The metropolitan district levies additional mill levies on top of county and school district levies, and the broker must ensure the buyer understands the total mill levy before contract execution
Metropolitan districts in Colorado are special districts authorized under C.R.S. § 32-1-101 et seq. to levy mill levies on properties within their boundaries to fund infrastructure bonds and ongoing services. Properties within a metropolitan district are subject to the county mill levy, school district mill levy, AND the metropolitan district's mill levy — resulting in a substantially higher total effective tax rate than comparable properties outside the district. Colorado law requires that buyers be informed about metropolitan district membership and its financial obligations. The CREC-approved Contract to Buy and Sell Real Estate includes provisions for metropolitan district disclosure, and brokers have an obligation to ensure buyers understand this material information before executing a contract.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
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Previous Question
Colorado law provides certain property tax exemptions and deferrals for qualifying individuals and properties. Which of the following is NOT a recognized property tax exemption or relief program available in Colorado?
Next Question
A Colorado homeowner who is 68 years old has owned and lived in her home for 12 years. Her home has an actual value of $600,000. She applies for Colorado's Senior Property Tax Exemption. If approved, which of the following correctly describes how her property tax will be calculated under the exemption?