Colorado Guide to 2024 Tax and Housing Changes

Colorado Guide to 2024 Tax and Housing Changes

Adapting to Capital Gains Tax Increases and Housing Reforms

Boulder’s real estate market is experiencing significant shifts driven by legislative changes, housing crisis debates, and innovative solutions for increasing housing availability. This article summarizes recent developments and provides insights for buyers, sellers, and investors.

Capital Gains Tax Increases: What You Need to Know

The Biden administration’s proposed capital gains tax increases are making waves among property owners and investors. The proposed fiscal year 2025 budget aims to raise federal capital gains taxes significantly for high-income earners. Under the new proposal, long-term capital gains taxes for those earning over $1 million annually could nearly double, reaching rates as high as 44.6% when combined with state taxes. This potential hike underscores the importance of strategic financial planning and leveraging opportunities like 1031 exchanges, which currently allow for tax deferral on like-kind real estate exchanges but are also under threat of repeal.

Colorado’s Bipartisan Property Tax Reform

In May 2024, Colorado passed a bipartisan property tax reform bill, SB-233, which reduces property taxes by $1.3 billion. While this reform provides some relief to property owners, it contrasts sharply with the looming federal capital gains tax increases. Investors in Colorado, particularly in Boulder, must navigate these changes carefully to optimize their financial outcomes. Boulder Financial Realty can assist in developing strategies that address both the benefits of the state tax cuts and the challenges posed by potential federal increases.

Boulder’s Housing Crisis and Legislative Responses

Boulder’s housing crisis has become a central issue in local politics, highlighted during the recent Democratic primary forum. Candidates debated various solutions to address the housing shortage, ranging from increasing affordable housing options to revising zoning laws. The discussions reflect the urgent need for actionable policies to alleviate the housing crunch and make Boulder more accessible to a wider range of residents.

One significant legislative development is the series of bills signed by Governor Polis aimed at increasing housing availability. These bills include the legalization of Accessory Dwelling Units (ADUs) and the creation of more housing near transit areas. These measures are designed to boost housing density and provide more affordable living options, which are critical steps in addressing Boulder’s housing challenges.

Strategic Opportunities for Real Estate Stakeholders

For buyers, sellers, and investors, these legislative changes and debates present both challenges and opportunities. Boulder Financial Realty is committed to guiding clients through this evolving landscape. Here’s how we can help:

  • Capital Gains Tax Planning: With potential increases in capital gains taxes, strategic planning is crucial. We assist clients in leveraging current tax deferral opportunities and preparing for future tax implications.
  • Property Tax Savings: Our team ensures you benefit from Colorado’s recent property tax reforms, optimizing your tax strategy to maximize savings.
  • Navigating Housing Policies: We stay abreast of local housing policies and legislative changes, providing you with the latest information and strategic advice to capitalize on new opportunities, such as ADUs and housing near transit areas.

For more information on how these changes can impact your real estate decisions, contact us at Boulder Financial Realty. We offer comprehensive market analysis, tailored strategies, and professional guidance to help you achieve your real estate goals in Boulder’s dynamic market.

To learn more about Governor Polis’s recent housing bills, visit the official announcement here. For insights into Boulder’s housing crisis and political responses, check out the detailed coverage by Boulder Reporting Lab here and here.

Amidst the evolving real estate landscape, Boulder has implemented significant changes to its Inclusionary Housing (IH) program, aimed at increasing affordable housing options within the city. The updated IH regulations require that 25% of all new residential developments contribute to affordable housing, either through on-site units, off-site units, or cash-in-lieu payments. These changes are designed to foster a more inclusive community, ensuring that residents of diverse income levels have access to quality housing. Boulder Financial Realty stays informed on these local policy shifts, helping our clients understand and leverage these regulations to make informed real estate decisions that align with their financial goals.” For more information, visit the official announcement on the City of Boulder’s website here.

Boulder Financial Realty, Catherine Chipman Broker

Colorado’s recent adjustments to Accessory Dwelling Unit (ADU) regulations are poised to have a statewide impact, including significant implications for the Boulder real estate market. These new rules simplify the process for homeowners to construct ADUs, aiming to increase housing availability and affordability across the state. By making it easier to build these additional units, the legislation supports diverse housing needs and provides homeowners with opportunities for additional income streams. At Boulder Financial Realty, we ensure our clients are well-informed about these changes, helping them explore the potential benefits of adding ADUs to their properties. By leveraging these new regulations, we assist clients in maximizing their property value and meeting the housing demands of the Boulder community.

Lastly, Boulder’s community grassroots organization “Bedrooms for People” are celebrating their win making all bedrooms legal, leaving behind years of draconian enforcement of over occupied homes with sufficient bedrooms. This is one of the most monumental changes I have seen in the planning department since the 1990’s.

Boulder Financial Realty is here to help you navigate these changes effectively and make informed real estate decisions. Contact us today at [email protected] or call/text us at 303-442-2626. We look forward to assisting you in achieving your real estate ambitions.