HB 25-1156
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
HB 25-1156: MAKE SENIOR HOME TAX VALUATION REDUCT
PERMANENT
Prime Sponsors:
Rep. Lieder
Sen. Kolker
Published for: House Finance
Drafting number: LLS 25-0317
Fiscal Analyst:
David Hansen, 303-866-2633
david.hansen@coleg.gov
Version: Initial Fiscal Note
Date: February 18, 2025
Fiscal note status: The fiscal note reflects the introduced bill.
Summary Information
Overview. The bill reduces property taxes beginning with property tax year 2027 by continuing the
qualified-senior primary residence real property classification and the associated assessed value
reductions created in Senate Bill 24-111 indefinitely.
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 $52.5 million
Transferred Funds $0 $0 $0
Change in TABOR Refunds $0 $0 not estimated
Change in State FTE 0.0 FTE 0.0 FTE 0.0 FTE
Page 2
February 18, 2025 HB 25-1156
Summary of Legislation
The bill permanently extends assessed value reductions for qualified-senior primary residence
real properties, which are a subclass of residential property. Under current law, the assessed
value reductions for qualified-senior primary residences are only effective for the 2025 and 2026
property tax years (PTY). The assessed value reductions mirror the benefit for the senior
homestead exemption by reducing assessed value by subtracting 50 percent of the first
$200,000 of actual value, before the assessment rate is applied. The subtraction is limited to the
lesser of $100,000 or the amount that reduces a property’s assessed value to $1,000.
The amount by which the bill reduces local government property tax revenue is required to be
reimbursed by the state. In years when the state refunds a TABOR surplus, the assessed value
reductions are accounted as a state TABOR refund to property taxpayers, paid via the
reimbursement to affected local governments.
Background
Senate Bill 24-111
Senate Bill 24-111 created the qualified-senior primary residence real property subclass for
senior property owners who previously qualified for the existing senior homestead exemption
on or after January 1, 2020. The bill also established a process for owner-occupiers to apply to
county assessors for the new subclassification, set up reporting requirements, and required
reimbursements for lost property tax revenue to local governments. For years in which the state
has a TABOR surplus, the bill established local reimbursements as a state TABOR refund
mechanism.
Homestead Exemption
The homestead exemption is a constitutional exemption available for owner-occupied primary
residences of qualifying seniors, veterans with a service-connected disability, surviving spouses
of veterans with a disability who previously qualified for the exemption, 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, or up to $100,000. A senior homeowner
is eligible to claim the homestead exemption if they meet the following requirements:
the homeowner is 65 years old as of January 1 of the tax year; and
the homeowner has occupied the home as his or her primary residence for the last 10 years.
Local Government Reimbursements
The state is required to reimburse local governments for the revenue reduction attributable to
the homestead exemption and qualified-senior primary residence real property classification
under Senate Bill 24-111. Reimbursements are made from the state General Fund via the
Department of Treasury. Page 3
February 18, 2025 HB 25-1156
TABOR Refund Mechanism
Reduced property tax under the homestead exemption, and qualified-senior primary residence
real property classification for FY 2025-26 and FY 2026-27, is accounted as a TABOR refund
mechanism under current law. A TABOR surplus collected in one fiscal year is set aside to fund
reimbursements to local governments for the tax reduction in the following year.
Assumptions
Based on data from the Colorado State Demography Office on senior households in Colorado,
demographic trends from the U.S. Census Bureau’s American Community Survey, and the
December 2024 Legislative Council Staff forecast for assessed values and homestead
exemptions, the fiscal note estimates that about 94,000 seniors who qualified for the homestead
from 2020 to 2026, but moved at least once during that period, will qualify for the
qualified-senior primary residence real property class designation in PTY 2027.
The fiscal note assumes that about 81 percent of Colorado’s projected 705,000 senior
households will live in owner-occupied homes, and that about 258,000 senior owner-occupied
households will not qualify for the existing senior homestead exemption. The fiscal note
estimates about 36 percent of senior owner-occupied households not qualifying for the current
exemption will qualify for the new class designation under the bill in PTY 2027. An estimated
additional 14,500 households will receive the new property class designation each year through
PTY 2029, equal to the number of seniors who are expected to have previously qualified for the
senior homestead exemption, sold their home in that year, and repurchased one in Colorado.
The average expenditure per senior for the reduced residential valuation is estimated at $561
beginning in PTY 2027 assuming households requalifying for the exemption have the same
geographic dispersion and home values as households qualifying for the existing senior
homestead exemption. For the vast majority of properties, the benefit under the qualified-senior
primary residence real property subclass is equivalent to the benefits received under the senior
homestead exemption. However, for certain low value properties, the value of the property tax
benefit for qualified-senior primary residence real property value reductions will be less than for
an equivalent home qualifying for the senior homestead exemption.
State Expenditures
Local Government Reimbursements
The bill increases General Fund expenditures to reimburse local governments for reduced
property tax revenue under the bill. In FY 2027-28, local reimbursements are expected to
increase by $52.5 million. These reimbursements may be paid from the state TABOR refund
obligation, as described in the TABOR Refunds section, or from revenue otherwise available for
the General Fund budget. However, a forecast of TABOR revenue is not available beyond Page 4
February 18, 2025 HB 25-1156
FY 2026-27, so it is unknown whether reimbursements will be paid as TABOR refunds in affected
years. Local reimbursements will grow as additional senior households qualify for the residential
property classification under the bill in successive years, as described in the Assumptions
section.
Department of Local Affairs
The bill minimally increases workload for the Division of Property Taxation in the Department of
Local Affairs to update manuals and guidance related to the qualified-senior primary residence
real property classification. The increased workload is similar to workload already required under
Senate Bill 24-111, and can be accomplished within existing appropriations.
TABOR Refunds
The bill will have no impact on the amount required to be refunded under TABOR beginning in
FY 2027-28; however, it may increase the amount refunded via property tax refunds by up to
$52.5 million in FY 2027-28 if there is sufficient surplus revenue. However, 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 property tax refunds will in turn decrease the amount required to be
refunded by the six-tier sales tax refund mechanism.
Local Government
Local Revenue
The bill has offsetting impacts on local government revenue beginning in FY 2027-28 that will
not change net revenue to any jurisdiction. It decreases property tax revenue with offsetting
increased state reimbursements to local governments. Under current law and with the extension
under the bill, county treasurers are required to distribute the reimbursement to each local
government as if the total property tax revenue lost had been regularly paid. 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
The bill increases expenditures for county treasurers and assessors to implement the senior
portability extension in the bill, with ongoing expenditures for application processing, and
reimbursements to local governments. Page 5
February 18, 2025 HB 25-1156
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed.
State and Local Government Contacts
Counties
County Assessors
Information Technology
Local Affairs
Property Tax Division – Local Affairs
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.