CO SPRINGS

Housing Costs

When times get tough and the economy is down, people start to hunker down and look for ways to save. One area that many people think that they won't be able to save in with their home and housing expenses. Usually the price of your house is pretty well fixed. However, despite popular belief, it is possible to reduce housing expenses, especially during hard times. By reducing housing expenses you can make life easier on yourself.

The first thing you want to ask yourself when trying to reduce housing expenses is do you really need what you have. While it may seem a bit extreme, most people would agree that the best way to reduce your housing expenses is to downsize. Smaller homes use less utilities, costs less, require less furniture and décor, and typically have lower property taxes as well. So downsizing can help you save a bundle in housing.

When determining if you should downsize or not, consider the following:

Is the average home or income in your neighborhood above your means? Many people move into homes that while seemingly affordable are in higher end neighborhoods, and places beyond their means. While their house may not be costing them too much, the inclination to keep up with the wealthier neighbors may. So, make sure you choose a neighborhood that fits your means.

Some people would argue that they need that size of home because of the number of people in their family, or the amount of things they have. However, you can ask yourself if it would be possible to find the same space in a less expensive neighborhood, without sacrificing your safety. Often times you pay a premium on the square footage because of the location. A gated neighborhood, for example, will cost more than a non-gated a few miles away. A beach front home will cost more than one a few miles inland. So, when trying to reduce your housing expenses, consider the price for the house versus the cost for the neighborhood.

Calculating Taxes

The Constitution of Colorado states that taxes for all property must be equally assessed and levied. Personal property that is for nonbusiness use is exempt.

El Paso County is responsible for assessment and collection of all property taxes in El Paso County.

The components of property tax calculations are:

• Market value of property
• Assessment ratio
• Mill levy

Market values:

The County Assessor, in accordance with state regulations, estimates actual market value of real property. The company, subject to audit by the County Assessor, must declare the value of commercial and industrial personal property.

Colorado Springs Economic Development Corporation

90 South Cascade, Suite 1050 | Colorado Springs, CO 80903
719-471-8183 | 719-471-9733 FAX | www.coloradosprings.org
last update: 03/06/07

Assessment levels:

The assessment level for commercial and industrial real and
personal property is 29% of market value. This is subject to
adjustment every other year.

Mill levies:

Mill levies are independently set by various taxing authorities; i.e.,
county, city, school districts, library district, special districts, etc.
The average total mill levy in 2005, for application 2006, was
approximately 67 mills.

Market Value x Assessment Level x Mill Levy = Approximate Taxes Due

An industrial property with a market value of $2,000,000

$2,000,000 x 0.29 x 0.067
Property tax = $38,860

Source: El Paso County Assessor Office, January 2007