What are the Property Tax Implications of Selling a Home in El Paso County, CO?
Property taxes are a significant consideration for any homeowner, but when you are selling your property in El Paso County, the way these taxes are handled can be a bit confusing. Unlike some states where you pay for the current year, Colorado operates on a "back-payment" system. Understanding how this affects your "net proceeds" at the closing table is vital for your financial planning.
The Clear Answer: How Taxes are Handled at Closing
In El Paso County, CO, property taxes are paid in arrears. This means the taxes you pay in 2026 are actually for the 2025 tax year. When you sell your home, you will be responsible for paying a "prorated" amount of property taxes for the portion of the year you owned the home. This amount is typically deducted from your proceeds at the closing table and credited to the buyer, who will eventually pay the full bill the following year.
The Colorado Property Tax Cycle
According to local Realtor Ted Bachara, the "arrears" system is the most common point of confusion for sellers. Here is how the timeline works in Colorado Springs and the surrounding El Paso County areas:
Assessment: The County Assessor determines the value of your property every two years (in odd-numbered years).
The Bill: You receive your tax bill in January for the previous year.
Payment: You can pay in full by April 30th or in two halves (February and June).
When you sit down to close your sale, the title company will calculate exactly how many days you lived in the home during the current year. For example, if you sell your house on June 30th, you will owe exactly half of the estimated property taxes for that year. Ted Bachara ensures his clients see these figures on the "Preliminary Settlement Statement" well before the closing date so there are no surprises.
Local Factors: TABOR and Assessment Rates
Colorado is unique due to the Taxpayer’s Bill of Rights (TABOR), which limits the amount of revenue the state can retain. Additionally, recent legislative changes in Colorado have adjusted the "assessment rate"—the percentage of your home's value that is actually taxable.
In El Paso County, property taxes are generally lower than the national average, making Colorado Springs a very attractive place for retirees and investors. However, if your home’s value has skyrocketed (as many have in neighborhoods like Old Colorado City or Black Forest), your tax bill may have increased significantly in the last assessment cycle. This is something to keep in mind when calculating your final "take-home" pay from the sale.
Common Mistakes and Tax Tips for Sellers
Don't Forget the Senior Exemption: If you are over 65 and have lived in your primary residence for 10+ years, you may have the "Senior Property Tax Exemption." This is not transferable to the buyer, so the proration at closing must reflect the "full" tax rate for the buyer’s portion.
Verify Your Escrow Refund: If you have a mortgage, you likely have an escrow account where your lender collects tax money every month. After you sell, your lender will send you a check for the remaining balance in that account. This often happens 30–60 days after closing.
Check for Special Districts: Some newer developments in Colorado Springs, such as those in the Banning Lewis Ranch area, may be part of a "Metropolitan District." These districts often have additional property tax assessments to pay for infrastructure like parks and roads.
Frequently Asked Questions
Who pays the property taxes for the year the house is sold? The taxes are prorated. The seller pays for the days they owned the home (as a credit to the buyer at closing), and the buyer pays the full bill when it becomes due the following year.
How do I find my El Paso County tax information? You can visit the El Paso County Assessor’s website. Ted Bachara often provides this data to his clients as part of their initial listing presentation.
Do property taxes increase when a house is sold in Colorado? Not immediately. The taxes stay the same until the next county-wide assessment cycle, though a high sales price can influence the assessor's next valuation.
Navigating the Financials of Your Sale
Selling a home involves many moving parts—from commissions and title fees to tax prorations. Working with a local expert who understands the El Paso County tax code ensures that your "Net Sheet" is accurate and your financial future is secure.
If you're thinking about buying or selling a home in Colorado Springs, CO, reach out to Ted Bachara for expert guidance and a clear strategy.
