Colorado Springs multifamily investment guide

Across this series we have found property tax regimes that differ enormously in level and in structure. What they have shared is that an owner could look up the applicable rate and hold it constant across a hold period. Indiana caps a multifamily building at 2 percent of gross assessed value and puts the cap in its constitution. Missouri assesses residential at nineteen percent and Kansas at 11.5, both stated plainly. Tennessee moves you from 25 to 40 percent at two rental units and then leaves you there.

Colorado does not work like that, and this is the single most important thing for an underwriter to understand about the state. The rate is recomputed annually.

The Division of Property Taxation sets out the structure plainly: "The calculation of property tax consists of three segments: the actual value, the assessment rate, and the mill levy. The assessor establishes the actual value of the property and the classification. The Colorado Constitution states that the general assembly determines the assessment rate, and the taxing entities control the mill levies."

The rate itself now has two values at once. For 2026 the residential local government assessment rate is "6.80% after a 10% reduction of the first $700,000 in actual value," subject to a minimum of $1,000 in assessed value. The residential school assessment rate for 2026 is 7.05 percent. The same building is therefore assessed at one rate for the mill levies of the county, the city and the special districts, and at a different rate for the school district levy.

And the rate is not fixed forward. The Division explains that "[s]tarting on January 15th, 2025, and every January 15th thereafter, the Legislative Council Staff (LCS) shall provide the State Board of Equalization (SBOE) with the information to calculate the balancing percentage and, after 2025, the correction percentage for the current property tax year," and that "[t]he calculated percentages are based on the estimated qualified local share of property tax revenue that LCS forecasts."

Read that as an owner. The assessment rate applied to your building next year is the output of a state revenue forecast, recalculated in January, by a board. It is not a number you can write into a ten year model and leave alone. In every other state in this series the assessment rate is the stable term and the mill levy is the variable one. In Colorado both move.

On classification, Colorado treats multi-family residential real property as a subclass of residential real property, and residential real property excludes hotels and motels. But the subclass structure has been restructured more than once since Senate Bill 21-293, so we would confirm the specific subclass and the rate currently applied to it with the county assessor for any asset rather than assuming the headline residential figure.

This applies across Colorado, including in Denver, whose guide addresses the state’s eviction and rent regulation regime rather than its assessment mechanics.

• Two residential rates apply to one building: 6.80 percent local government, 7.05 percent school.
• The local government rate carries a 10 percent reduction on the first $700,000 of actual value.
• The rate is recalculated every January from a Legislative Council Staff revenue forecast.
• Multi-family is a subclass of residential, but confirm the applicable subclass with the assessor.

In most states the assessment rate is the fixed term and the mill levy moves. In Colorado both move, and the rate is the output of a forecast recalculated every January.

The demand case for this market rests on the installations, so the direction of the government payroll matters more here than it would anywhere else.

It is currently negative. Government employment fell 2.0 percent over the twelve months to July 2026, on 54,700 jobs. That is the metro’s largest sector contracting, and it is the same pattern we found in San Antonio, where government fell 1.6 percent. Two military metros, the same direction, in the same period.¹

Total nonfarm employment was 333,300, up just 0.3 percent, on a civilian labor force of 390,000. Unemployment rose to 4.3 percent from 4.1 in June. Five of the ten reported sectors contracted: information fell 12.2 percent on a small base of 4,300, other services 6.7 percent, financial activities 1.5, trade, transportation and utilities 1.0, and government 2.0.¹

The growth was in education and health services at 4.7 percent on 53,300 jobs, leisure and hospitality at 2.8 percent, construction at 2.7 percent and professional and business services at 1.9 percent on 54,500 jobs. Manufacturing, at 11,600, was exactly flat.¹

One methodological note that matters in a military market. The published nonfarm payroll series counts civilian employment. The uniformed personnel at the installations around this county do not appear in the 333,300 figure, and neither do they appear in the civilian labor force of 390,000. So the employment series both understates the true payroll base of this metro and, more importantly for an owner, does not move when troop levels do. A drawdown or a build-up at an installation would show up in your rent roll well before it showed up in this table.¹²

That is the risk to hold in mind. This county has an exceptionally stable resident base by the standards of this series, with poverty at 8.7 percent and median household income of $90,363. What it does not have is local control over the payroll that anchors it.¹²

• Government employment fell 2.0 percent on 54,700 jobs.¹
• Total nonfarm rose only 0.3 percent and unemployment rose to 4.3 percent.¹
• Uniformed personnel appear in neither the payroll series nor the civilian labor force.
• Poverty is 8.7 percent and median household income $90,363.²