Land (Agricultural & Vacant)
Agricultural land is:
Located in an incorporated or unincorporated area (without regard to zoning)
Used in the last two years and presently used as a farm or ranch (or is
being restored through conservation
practices through a conservation district approved plan)
A parcel of land used as a farm or ranch with a decreed water right or final permit to appropriated
for non-residential purposes
and the water is used for
production of agricultural or livestock products
Forest land: 40 acres or more of forest land that is subject to a forest
management plan (land is used to produce
tangible wood products for profit)
Conservation easements: 80 acres or more of land (or less than 80 acres with
no residential improvements)
subject to a perpetual conservation easement which was granted at the time the land was
The easement must have been granted exclusively for
conservation purposes and all current and future uses
are described in the
Farm – land used to produce agricultural products for the primary
purpose of obtaining a monetary profit.
Products include plant and
animal products from farming, ranching, animal husbandry, and
Ranch – land used for grazing livestock for the primary purpose of obtaining
a monetary profit products for profit
Livestock – domestic animals used for food for human or animal consumption,
breeding draft, or profit products
Improvements – structures, buildings, fixtures, fences, and water rights
attached to the land. Homes and
buildings are appraised and valued separately from the land. Water rights, windmills and sprinklers are
improvements that are appraised and valued as a unit with the land.
Agricultural land value is based on the actual value of agricultural lands,
exclusive of building improvements, and is determined by the earning or
productive capacity of such lands, capitalized at a rate of 13%, §
Earning or productive capacity is determined by measuring the landlord’s net
income over a reasonable amount of time (the current 10-year average)
The net income is equal to the gross income less allowable expenses, including baling, fencing, water, fertilizer,
alfalfa seed, and chemicals. Those expenses must be typical
for the use.
The gross income is determined by the earning or productive capacity of the
To ensure that your property is classified properly, the Assessor may
request additional information from you, which could be a copy of your
previous year’s income tax 1040-F form, a grazing lease, or an agricultural
land classification questionnaire. The Assessor may also conduct a physical inspection of your property.
Please note that there is a two-year waiting period after the year of
application before the classification will take effect.
Please Click Here for Application
For more information, please
here for a copy of the State brochure.
Vacant Land is assessed at 29% of
actual value and valuation is based on the actual value of the property
based on the market approach, § 39-1-103(5)(a), C.R.S.
Vacant land is one of the most controversial classifications because it is
assessed at 29%. Vacant land does not have a residential house, but it may
have a minor structure, such as a detached garage. Vacant land does not
include land used for ranches and farms which qualify for agricultural
The Assessor’s office often hears from homeowners who own a parcel of land
adjacent to property that is classified residential. The homeowner is
unhappy because the taxes on the vacant parcel are more than the taxes on
the parcel with the house. One
example is a 2.2-acre parcel of land valued at $113,000 with taxes of
$2,254, which is adjacent to parcel with a 2000 square foot house on 2.4
acres of land with taxes of $1,154.
If you are using a vacant lot or parcel adjacent to your residence, you may want to consider vacating
the boundary line between the parcels. You should contact your city or
county planning department for assistance.
If you do not wish to vacate the boundary line, you may contact the
Assessor’s office to complete a Request for Combination of Properties form.
This request will combine the parcels, provided that certain conditions are
met. Conditions include the unity of ownership, which means that the
ownership of the vacant parcel must be identical to the ownership of the
parcel containing the house. The vacant parcel must be contiguous to and
used as an integral part of the residence for the support, enjoyment or
other noncommercial activity of the homeowner. There are other conditions,
so you will need to call the Assessor’s office to request the form, a
review, and an inspection.
Subdivider’s & Developer’s Discount
By law, the Assessor must consider and, if appropriate,
apply present worth valuation procedures when using the market approach to
valuing vacant land, § 39-1-103(14)(b), C.R.S. Present worth valuation is
usually applied to subdivision lots owned by developers or subdividers and,
it involves discounting based on various factors. The use of present worth
valuation is used to account for the time necessary to sell an inventory of
vacant lots and, under Colorado law, equates to actual or market value. This method of valuation is also
applied to lots held in inventory by banks and lending institutions pursuant
to foreclosure or deeds in lieu of foreclosure.