In its October arguments, the Colorado Supreme Court took up a group of property tax cases that are key to differentiating residential land from vacant land. Interpreting residential land’s definition has significant implications for landowners and counties collecting the property tax revenue: Residential land is taxed on an assessment rate of 7.15%, while the assessment rate for vacant land is 29%.
Colorado law defines residential land as “a parcel or contiguous parcels of land under common ownership upon which residential improvements are located and that is used as a unit in conjunction with the residential improvements located thereon.”
The three appeals the Colorado Supreme Court heard each address how to interpret a phrase in the law: Whether “contiguous” parcels have to physically touch, the meaning of “used as a unit” requirement and whether record title of properties have to be held by the same person or entity to satisfy the “common ownership” requirement.
The court chose the appeals out of more than 300 similar property tax disputes that have gone to the Board of Assessment Appeals, one option in addition to filing a claim in district court or going to arbitration.
All three cases originated in Summit County. Brad Schacht, a shareholder at Otten Johnson Robinson Neff + Ragonetti who practices commercial litigation, said these types of cases are most likely to come out of Colorado’s sparsely populated areas, where there’s more vacant land to buy for personal use.