How much is taken out of my paycheck?
Fed income tax 11 percent of gross pay $140 x .11
State income tax* 4% of gross pay $140 x .04
Social Security tax 6.2% of gross pay $140 x .062
Medicare tax 1.45% of gross pay $140 x .0145
COLORADO HOMES TAXED AT
ONE OF THE LOWEST RATES NATIONALLY
The effective property tax rate for single-family homes in Colorado last year averaged 0.52 percent versus the 1.15 percent rate averaged nationally[The real estate market in the Denver metro area continues to heat up this Spring. Houses haven't been staying on the market long in Aurora. Homes for sale in the Saddle Rock neighborhood.
The real estate market in the Denver metro area continues to heat up this Spring. Houses haven’t been staying on the market long in Aurora. Homes for sale in the Saddle Rock neighborhood.
Not that it may offer much solace to homeowners trying to come up with property taxes due on April 30, but Colorado homes are taxed at some of the lowest rates in the country.
The effective property tax rate for single-family homes in Colorado last year averaged 0.52 percent versus the 1.15 percent rate averaged nationally, according to ATTOM Data Solutions, which looked at property taxes on more than 84 million single-family homes in 586 U.S. counties.
Nationally, single-family homeowners paid an average of $3,296 in property taxes last year, while in Colorado they paid only $2,046. The tab was smaller here even though the average market value of a home, at $394,604, was $109,110 higher than the U.S. average of $285,495.
Only Hawaii and Alabama had lower effective property tax rates than Colorado. And in New Jersey, Illinois and Texas, residential property tax rates were around four times higher.
How much is capital gains tax in Colorado?
Subject to certain requirements, if you sell Colorado real or personal property that you have held for at least five years, the first $100,000 of capital gains associated with that sale would be excluded from your Colorado taxable income and therefore save you the 4.63% Colorado income tax on that gain.
How much is inheritance tax in Colorado?
If the asset value exceeds the "exemption" amount, there can be a significant estate tax at rates between 35% and 55%. Currently the estate tax has an exemption amount of over $5 million and a tax rate of 35%
Colorado’s lower rates come with a price. When local governments and school districts don’t collect enough in property taxes, the state must back-fill from its coffers, leaving less money to go around for things like roads and higher education.
“This puts more pressure on the state budget,” said Chris Stiffler, an economist with the Colorado Fiscal Institute in Denver.
Colorado legislative leaders want to refer a measure to the ballot that would lift the state sales tax from 2.9 percent to 3.52 percent and raise $705 million a year for transportation projects.
One reason Colorado ranks so low on property tax rates is the passage in 1982 of the Gallagher Amendment, which limits the share of the property tax base attributable to residential to 45 percent of the total.
Over the decades, Gallagher, in combination with other measures like the Taxpayer’s Bill of Rights, has pushed down Colorado’s residential property tax rates. But homeowners don’t necessarily realize or appreciate it, because rising home prices, primarily along the northern Front Range, have forced them to write bigger checks to their counties, Stiffler said.
Nor do most people realize the connection between low residential property tax rates and more rapid home prices gains.
“Property taxes are a major cost of homeownership and factor into a buyer’s decision to buy or not buy. They also affect a borrower’s debt-to-income ratio, which can impact a lender’s decision to lend or not lend,” said Daren Blomquist, a senior vice president at ATTOM Data Solutions.
Everything else being equal, a borrower who pays less in property taxes can qualify for a larger mortgage. Having more borrowing capacity in a market gives home prices more room to rise when demand outstrips supply.
In California, Proposition 13 caps property tax increases to 2 percent or less a year. Home prices in that state are up 76 percent over the past five years. In Colorado, median home prices are up 59 percent the past five years, Blomquist said.
Both states outpaced the 45 percent gain in U.S.home prices over the past five years. Conversely, high property tax rates can weigh on a market and dampen home price growth and home sales.
“We see evidence of this in states like New York and New Jersey, where home price appreciation over the past five years has not been as robust as in many other markets,” Blomquist said.
In New Jersey, home prices are up only 5 percent in the past five years and in New York less than 1 percent. Even in Texas, considered an economically robust state with strong migration, the average home costs $168,100 less than in Colorado.
Among Colorado’s larger metro areas, Grand Junction had the lowest effective property tax rate on single-family homes at 0.42 percent, followed by Colorado Springs at 0.44 percent. Greeley at 0.46 percent, Fort Collins at 0.48 percent, Boulder at 0.54 percent, and Denver at 0.56 percent.
Within metro Denver, Douglas County had the highest effective residential property tax rate at 0.63 percent, followed by Arapahoe at 0.6 percent and Adams at 0.57 percent. Differences in county mill levies explain those differences.