Commercial Real Estate & Possessory Interest

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General Information

The Commercial Real Estate Team values multi-family residential, commercial and industrial properties. Commercial and Industrial properties include non-residential land and buildings that are generally used to produce income through rents, providing services, or manufacturing products. Colorado law requires Assessors to address all three approaches to value, when appraising commercial and industrial property.

Calculating Your Assessed Value & Estimated Taxes Due

$150,000 (Market Value) x .2790 (Commercial Assessment Rate) = $41,850 (Assessed Value)

then:

$41,850 (Assessed Value) x .069494 (Mill Rate) = $2,908.32 (Estimated Taxes Due)

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Learn More About Your Commercial Valuation

Three Approaches to Value

There are three approaches to value.

Cost Approach – determines the replacement cost of an improvement less depreciation plus land value
Sales Comparison Approach – estimates a property’s value by comparing the property to similar properties that have sold.
Income approach – is a method of estimating the present value of anticipated income benefits.

Please feel free to contact the Assessor’s Office for more clarification and assistance on how to research values on these types of properties.

Commercial Assessment Rate

The 2023 assessment rate for non-residential property is 27.9% of the market value. In 1982, this Amendment § 3(1)(b), art. X, COLORADO CONSTITUTION was enacted.

Possessory Interest

Notices of Valuation for Possessory Interests will be Mailed to the Applicable Property Tenants in May of Each Year

Possessory interest is a private property interest, in a tax-exempt property, or the right to the occupancy and use of any benefit in an exempt property right. This right to use can be granted by several arrangements including, a lease, permit, license, concession or contract.

The value of a possessory interest is estimated by calculating the discounted net present value of the actual lease amounts, paid to the tax-exempt property owner. For 2023, possessory interests will be assessed at 26.4%. Payment of taxes for the possessory interest will be the responsibility of the tenant.

Possessory Private Use List

We have identified a number of possible private uses, within tax-exempt properties in El Paso County. These Possessory Interests include, but are not limited to:

Grazing Leases on Federal or State Owned Land
Private Day Care Providers in Public Schools
Privately Leased Medical Offices in Hospitals
Concessions at the Colorado Springs Airport

Possessory Private Use List Cont.