"Unless otherwise specified in Additional Provisions, these prorations are final." That line sits in Section 16.1.4 of Colorado's standard residential purchase contract. Most years nobody reads it closely. In Cherry Hills Village, the draft 2027 city budget takes the City's own property tax levy from 14.722 mills to 0 mills for one year and brings it back in 2028. When one layer of a property tax bill disappears for a year and then returns, the method used to estimate taxes at closing can change the numbers.
The holiday is real money. City staff estimate it at about $3,800 off the average homeowner's 2027 property tax bill. It is also temporary, and it covers only part of the bill. Anyone buying or selling in the Village over the next year will run into it in the settlement statement before they see it on a tax bill.
The checkbox in Section 16
The Colorado Real Estate Commission's current residential contract, form CBS1, became mandatory on January 1, 2026. Its tax proration clause gives the parties a choice of method:
"general real estate taxes for the year of Closing, based on [ ] Taxes for the Calendar Year Immediately Preceding Closing [ ] Most Recent Mill Levy and Most Recent Assessed or Actual Valuation per the county assessor, adjusted by any applicable qualifying seniors property tax exemption, qualifying disabled veteran exemption or [ ] Other"
The choice matters because Colorado property taxes are paid in arrears. Arapahoe County's Assessor's Office explains that "taxes for the preceding year attach as a lien on Jan. 1 of the following year." On the day a home closes, the taxes for that year have not been billed yet. The contract has the seller credit the buyer for the seller's share, based on an estimate.
In most years the two methods give similar results because the levies don't move much. That will change while the City's 14.722 mills go to zero and come back.
| Proration basis in CBS1 | What it draws on | Why the holiday matters |
|---|---|---|
| Taxes for the calendar year immediately preceding closing | Last year's actual tax bill | That bill may or may not include the City's 14.722 mills, depending on which year it covers |
| Most recent mill levy and most recent valuation | The latest certified levy applied to the latest assessed value | The latest certified City levy could be 0 or 14.722, depending on when the closing falls |
| Other | Whatever the parties write in | Lets the parties pick a method on purpose |
The City's own documents call this relief a reduction in "the 2027 property tax bill." Your title or closing company is the right place to confirm which tax year and which certified levy apply to your closing date, and to read the contract once more before signing. This post is general information, not legal, tax or financial advice. Confirm your own situation with your attorney, tax advisor or closing company.
Why the City chose a one-year holiday
The City had other options. At its March 3, 2026 retreat, City Council looked at three ways to return money to taxpayers: a one-time rebate, a one-year property tax holiday, or both. Finance Director Kelly Newman's August 4 staff memo to City Council recommended the holiday.
The memo gave a few reasons. A rebate check "may be taxable to the residents depending on their specific tax situation." Staff would also have to mail checks to roughly 2,200 households and then file 1099-G forms with the State of Colorado and the IRS in January 2028. A flat rebate also isn't tied to how much tax each owner pays. A levy reduction scales with each home's valuation, which the memo calls "more equitable."
The second reason explains why the holiday lasts only one year. The memo cites C.R.S. §§ 39-1-111.5 and 29-1-1702 for the point that a temporary mill levy reduction "does not alter the City's underlying voter-approved mill levy." That lets the City restore the levy in 2028 without a new vote. The Villager reported public testimony at the August meeting that TABOR limits make an open-ended rate cut impractical, because restoring the levy afterward would need voter approval.
That legal structure is why the savings come back out of the bill on a schedule. Under the current plan, City property taxes return to the adopted levy in 2028. A buyer comparing the Village with other premium addresses should treat the 2027 bill as a one-year dip. It doesn't tell you what the carrying cost will be after that.
Zero city mills still leaves most of the bill
A City levy of zero takes about one-seventh off a Cherry Hills Village tax bill. The City's 14.722 mills are split 7.300 to the General Fund and 7.422 to the Parks Fund. Staff put that at about 15% of residents' total levies, with an estimated average 2027 property tax of $26,000 per home and about $3,800 of it going to the City.
Arapahoe County's 2025 Abstract of Assessments and Levies shows where the rest of the bill comes from. These are tax year 2025 levies, the most recent abstract available:
- Cherry Creek School District: 54.108 mills
- Englewood School District: 51.071 mills
- Arapahoe County: 16.959 mills
- City of Cherry Hills Village: 14.722 mills
Village addresses fall in different tax areas, so the exact mix varies by street. In one Village tax area on the County's 2025 levy percentage table, the City's levy makes up 13.99% of the total. School and county levies make up most of the bill, and the holiday doesn't change them. The County Assessor notes that it doesn't set any of these levies. Each taxing entity sets its own.
Where the $8.5 million comes from
The October 20 proposed-budget memo from City Manager Chris Cramer and Kelly Newman estimates total relief at about $8.5 million. That breaks down into roughly $4 million in General Fund property tax revenue and $4.5 million in Parks Fund revenue. The August estimate was $8.4 million. The final figure depends on values the City expects to receive in early December.
The General Fund covers the whole cost. Under the draft, it transfers about $4.5 million to the Parks Fund so the parks budget stays whole. That transfer matters because the Parks Fund has little room to spare. The August memo projects the Parks Fund's unreserved balance falling to about negative $1 million in 2029, the year the Quincy Farm Hopkins House restoration is scheduled. The memo says the City would need a General Fund loan, grants or a smaller project scope to cover it.
The General Fund can absorb the cost. The draft projects its ending balance at $41.86 million at the end of 2026 and $34.1 million at the end of 2027, with $23 million unassigned. Staff also estimated about $4.9 million in interest the City would no longer earn through 2045. The City is using reserves to pay for one year of relief. Paying for a permanent cut would take ongoing revenue, and the voter-approved levy stays in place for 2028 and later.
The remaining dates
As of early November, the holiday is in the draft budget but hasn't been adopted. The October memo calls the draft a working document with placeholders. These are the scheduled steps:
- November 17, 2026. Public hearing and first reading of the 2027 budget ordinance at City Hall, 2450 E. Quincy Avenue.
- December 14, 2026. Final 2027 budget presented to Council, when exact property tax numbers are expected.
- December 15, 2026. Deadline to certify the mill levy to Arapahoe County.
- Early January. The Arapahoe County Treasurer usually mails tax notices two to three weeks into the new year. The first half is due by the last day of February, the second half by June 16, and a single full payment by April 30.
The Treasurer's Property Tax Search portal shows the original tax statement for any parcel. That is the best place to check the actual levy lines once bills are issued.
Short answers
Does the holiday remove all property tax on a Cherry Hills Village home? No. It sets only the City's 14.722 mills to zero. School district, county and other levies stay in place. City staff put the City's share at about 15% of residents' total levies.
Is it permanent? No. City documents describe it as a one-time reduction for 2027, with the adopted levy resuming in 2028.
Is the $3,800 figure guaranteed? It's a staff estimate for the average homeowner. Relief varies by property valuation, and the City says the exact amount will be finalized after values are certified.
Who pays a mortgage-escrowed bill if it comes in lower? The Treasurer's office says owners remain responsible for timely payment even when a lender pays from escrow. Your loan servicer can tell you how a lower bill affects your escrow account.
If you are planning to buy or sell in Cherry Hills Village while the levy goes to zero and back, The Galansky Group can go through the Section 16 proration choice with you and your closing company before the contract is signed. Request a Concierge Consultation to set that up.
