HB 25-1111
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
HB 25-1111: EXPAND HOMESTEAD EXEMPTIONS
Prime Sponsors:
Rep. DeGraaf
Published for: House Finance
Drafting number: LLS 25-0559
Fiscal Analyst:
David Hansen, 303-866-2633
david.hansen@coleg.gov
Version: Initial Fiscal Note
Date: February 5, 2025
Fiscal note status: The fiscal note reflects the introduced bill.
Summary Information
Overview. The bill increases the value of the homestead property tax exemption for most qualifying
households including qualifying seniors, veterans with a disability, or Gold Star surviving spouses starting
with property tax year 2025.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
State Expenditures
TABOR Refunds
Local Government
Appropriations. No appropriation is required.
Table 1
State Fiscal Impacts
Type of Impact
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
State Revenue $0 $0 $0
State Expenditures $0 $0 up to $306 million
Transferred Funds $0 $0 $0
Change in TABOR Refunds
1
$0 $0 $0
Change in State FTE 0.0 FTE 0.0 FTE 0.0 FTE
1
See Table 2 for more detail. Page 2
February 5, 2025 HB 25-1111
Summary of Legislation
Beginning with the 2025 property tax year (PTY), the bill expands the value of the homestead
exemption for most qualifying properties by increasing the amount of actual value it can be
applied to. The exemption under the bill is changed from 50 percent of the first $200,000 of
actual value of a qualifying property, to the lesser of 50 percent of the actual value or 50 percent
of the estimated state median home value.
In addition to the expansion of the allowable exemption amount, for each reassessment cycle,
the bill requires Legislative Council Staff to calculate and provide the Division of Property
Taxation with the estimated state median home value based on data from the U.S. Census
Bureau and Federal Housing Finance Agency. If the median home value declines, the estimated
state median home value for the previous reassessment cycle is used.
Lastly, the bill makes conforming statutory changes related to House Concurrent
Resolution 25-1001 concerning senior homestead exemption portability, that would take effect
if HCR 25-1001 is approved by voters at the November 2026 election.
Background
Homestead Exemption
The homestead exemption is available for owner-occupied primary residences for qualifying
seniors, veterans with certain service-connected disabilities, surviving spouses of veterans with a
disability who previously qualified for the exemptions, and Gold Star surviving spouses. Under
current law, the homestead exemption applies to taxes that would be assessed on 50 percent of
the first $200,000 of the home’s value. For example, a $150,000 residence is taxed as if it were
worth $75,000, and a $500,000 residence is taxed as if it were worth $400,000. For seniors, the
homeowner is eligible to claim the exemption if they are 65 years old as of January 1 of the tax
year, occupied the home as a primary residence for at least 10 years, and submit an exemption
application with the county assessor.
The Colorado Constitution allows the General Assembly to adjust the amount of actual value
(currently $200,000) to which the exemption applies. The amount has previously been lowered
to $0 following recessions, but has never been increased to a level above $200,000.
Senior Homestead Exemption Portability
Under current law in the Colorado Constitution, senior homeowners that qualify for the senior
homestead exemption but move, are not eligible for the homestead exemption until they have
lived in their home as a primary residence for 10 years. HCR 25-1001, if approved by voters at
the November 2026 General Election, changes the constitution to allow these homeowners to
once again qualify for the senior homestead exemption for their new primary residence. Page 3
February 5, 2025 HB 25-1111
Local Government Reimbursements
The state is required to reimburse local governments for the property tax revenue reduction
attributable to homestead exemptions. These reimbursements are made as expenditures from
the state General Fund via the Department of Treasury.
TABOR Refund Mechanisms
Reimbursements to local governments for homestead property tax exemptions are the first of
three TABOR refund mechanisms under current law. A TABOR surplus collected in one fiscal year
is set aside to fund these reimbursements in the following fiscal year.
Assumptions
The fiscal note estimates are based on data for existing properties qualifying for the homestead
exemption through the Division of Property Taxation for PTY 2023. Estimates assume an
estimated state median home value of $566,000 for PTY 2025 based on the median home value
as reported in the U.S. Census Bureau’s 2023 American Community Survey, and changes in the
Federal Housing Finance Agency’s seasonally adjusted Quarterly Purchase-Only House Price
Index for Colorado through the third quarter of 2024. Homestead exemptions under current law
are based on the December 2024 Legislative Council Staff forecast.
For property tax year 2025, the bill is estimated to increase the value of the average homestead
exemption from $540 to $1,317. For PTY 2026, the average value of the homestead exemption is
estimated to increase from $563 to $1,369. For PTY 2027, homestead exemptions and average
exemption value was grown based on year-over-year growth from 2025 to 2026. Average
median home value was increased by 7 percent.
State Expenditures
State Workload
Workload in the Division of Property Taxation in the Department of Local Affairs will increase to
review and audit applications for expanded exemptions, to update informational materials, and
to respond to questions from taxpayers. Workload in Legislative Council Staff will increase to
calculate the estimated state median home value. The increased workload can be accomplished
within existing appropriations.
Local Reimbursements
Increasing the value of the homestead exemption for most homeowners under the bill will
increase the amount refunded for reduced property taxes paid through reimbursements to local
governments. In years when the state refunds sufficient revenue collected in excess of the
TABOR limit, the bill does not require General Fund expenditures that would otherwise be Page 4
February 5, 2025 HB 25-1111
available for the General Fund budget. However, in years when the state does not refund a
TABOR surplus, the bill requires General Fund expenditures in the amount of the
reimbursements. In FY 2025-26 and FY 2026-27, local reimbursements are projected to be paid
with TABOR surplus revenue and are not expected to impact expenditures available for the
General Fund budget, as noted in the TABOR Refunds section. As a forecast of TABOR revenue is
not available beyond FY 2026-27, General Fund expenditures for reimbursements in FY 2027-28
could total up to $306 million, as shown in Table 1.
Beginning with FY 2027-28, the bill will conditionally increase the value of senior homestead
exemption portability in HCR 25-1001. However, the conditional impacts related to senior
homestead portability are not included in the fiscal note.
TABOR Refunds
The bill has no impact on the amount required to be refunded under TABOR in FY 2025-26 and
FY 2026-27; however, it increases the amount refunded via homestead exemptions and reduces
the amount refunded through the six-tier sales tax refund mechanism. In FY 2025-26, the
amount refunded via homestead exemptions is estimated to increase by $247.5 million, up from
$172.2 million to $419.7 million, as shown in Table 2. In FY 2026-27, refunds for homestead
exemptions are estimated to increase by $264.9 million, up from $184.9 million to
$449.8 million. A forecast of TABOR revenue is not available beyond FY 2026-27.
In years with sufficient surplus revenue, an increase in the amount refunded via homestead
exemptions will in turn decrease the amount required to be refunded by the six-tier sales tax
refund mechanism. Beginning with FY 2027-28, the bill will conditionally increase the value of
senior homestead exemption portability in HCR 25-1001. However, the conditional impacts
related to senior homestead portability are not included in the fiscal note.
Table 2
Change in TABOR Refunds
1
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
Out Year
FY 2027-28
Refund Property Tax $247.5 million $264.9 million not estimated
Refund Six-Tier Sales and Use Tax -$247.5 million -$264.9 million not estimated
Net Change in TABOR Refunds $0 $0 not estimated
1
The bill conditionally changes TABOR refunds beginning in FY 2027-28 by larger amounts if voters
approve a measure creating senior homestead exemption portability as noted in the bill. A forecast of
TABOR revenue is not available beyond FY 2026-27. Page 5
February 5, 2025 HB 25-1111
Local Government
Local Revenue
The bill has offsetting impacts on local government revenue that will not change net revenue to
any jurisdiction. It decreases property tax revenue with offsetting increased state
reimbursements to local governments, as shown in Table 2. The bill may affect local government
TABOR refunds if local voters have exempted one of, but not both of, property tax revenue and
revenue received from the state government.
Local Expenditures
Workload for county assessors may increase to administer more exemptions under the
resolution.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed, except that conforming statutory changes for senior homestead
exemption portability only take effect upon official declaration by the Governor that
HCR 25-1001 was passed by voters at the November 2026 general election.
State and Local Government Contacts
Counties
County Assessors
Information Technology
Legislative Council Staff
Local Affairs
Property Tax Division - Local Affairs
Revenue
Secretary Of State
Treasury
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.