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Shared Expenses & Understanding Property Taxes at Sterling Ranch

Many homebuyers these days are wise enough to look beyond the purchase price of their home, and to consider their annual expenses associated with homeownership as well. This is something the development team at Sterling Ranch understood, as we took careful measures to incorporate energy efficient design guidelines for our builders, for example.

Within the master-planned community development model, though, there is a unique cost structure that many homebuyers don’t fully understand, so we wanted to help spell this out as clearly as possible.

First, let’s acknowledge the most common misperception. Living at Sterling Ranch does not come with HOA dues. All shared community costs that are associated with homeownership at Sterling Ranch come in the form of a Mill Levy. The biggest difference between HOA Dues and Mill Levies? Tax allocation. HOA Dues are not tax deductible as a part of the standard homeownership tax deductions, though Mills are.

The Sterling Ranch Metro District mill levy, the HOA-esque equivalent line item, is 88.444 mills. This Metro District mill levy includes all the amenities that are normally incorporated within an HOA fee such as snow removal, recreation center access, and landscaping of common grounds. In addition, Sterling Ranch includes some unique additional amenities in that amount such as annual parks passes to Colorado’s State Parks.

In addition to this particular element of Sterling Ranch homeownership, there are also the other standard government property tax elements that all homeowners have whether in a condominium, single-family home, townhome, or otherwise.

ESTIMATING STERLING RANCH RESIDENTS’ ANNUAL PROPERTY TAXES

Let’s reiterate, Sterling Ranch does not have an HOA fee associated with homeownership. Therefore, the total annual cost reflected here is the total annual cost all buyers will have at Sterling Ranch. The only costs this won’t include will be your water or energy costs, or those security systems you decide to purchase or those great Netflix accounts we know you all have.

As a new community, buyers don’t have the easy option of checking prior years’ tax records to help estimate upcoming property tax bills. But that’s okay, because we have some insights into the formula used to calculate this, so you can plan ahead for the upcoming tax season.

To calculate your property taxes should you choose to purchase a home at Sterling Ranch, you need to know three things:

(1) the assessed value of the property, as calculated by the Douglas County Assessor,

(2) the assessment rate on the property, and

(3) the current mill levy rate

Once you know these three things, then you can multiply the three numbers and determine your annual tax payment.

When calculating the assessed value, you take whatever the value of the home is per the Douglas County Assessor, which the builders will be able to provide you. For modeling’s sake, let’s assume that number is $500,000. Multiply $500,000 times the current assessment rate, which is 7.20% (as of 2017). This totals to $36,000, which gives us your assessed value. Now you have answers (1) and (2) for your property tax formula.

Next, take $36,000 and multiply it by .165542. This is the total mill levy as imposed by the State of Colorado, Douglas County, and the Sterling Ranch Metro District. So, per this formula, one can calculate an annual $5,959 in property taxes.

As a quick aside, 7.20% is the current assessment rate. Not long ago the assessment rate was 7.96%. The assessment rate is established by the Colorado State legislature every odd numbered year, so you should be aware that the assessment rate is subject to change. In addition, the mill levy could change in future years as well, so none of these numbers are ever etched in stone and should be verified before calculating.

In case you are wondering where exactly these property taxes are going, then let us help you better understand that as well. Currently, there are 12 separate taxing authorities that assess the mill levies against properties in Sterling Ranch.

These 12 taxing authorities assess 165.542 mills (or for calculation purposes, .165542 mills). The Sterling Ranch Colorado Metro District (88.444 mills); the Douglas County Re-1 School District (30.942 mills); and the Douglas County Government (19.774 mills) are the largest taxing entities on our homes. The other 9 combine for the roughly 25 remaining mills.