Today we are going to dive deeper and try and answer the question, Is a metro tax district right for you?
I will admit I am not the biggest fans of metro districts. Especially for my first time home buyers that are really trying to stick to a monthly budget. There are just a lot of variables.
What I do find is that many don’t even know what a metro district is or why it may or may not be the right choice for the.
What is a Metro District?
Metro Districts or Metro Tax Districts are a special taxing district that are created to help finance the infrastructure within the neighborhood. So think roads, parks, improvements, snow removal etc. It will depend on the specific neighborhood as to what they use this funding for.
Many agents selling a home in a metro district will tout that there is no HOA or a small HOA but then you look at the taxes and wonder, why the heck are they so high. Well, that is because they rolled everything into your taxes.
The Advantages of a Metro Tax District
So let’s talk about why a metro tax district might work for you.
- Amenities. Many metro tax districts like Barefoot Lake in Firestone offer amenities like pools, lakes, tennis courts, trails. The development of these are paid for by the higher taxes you pay.
- A metro tax district MIGHT have better infrastucture. Roads are better, footpaths are maintained, water lines and drainage may be upgraded more often.
, - Well maintained public services, amenities , community events may increase community within the neighborhood.
- Financial Flexibility – The hoa may in fact be lower because developers are spreading payments out.
The Disadvantages of a Metro Tax District
Ok, so why do I not love tax districts for everyone.
Your Taxes Can Rise without Your Property Value Rising: This is because the tax district can decide they need more money to expand the neighborhood or build some big infrastructure project and you are going to help fund that.
Tracking How Your Funds Are Being Spent. Many metro districts aren’t 100% transparent on how they are spending the money you are giving them.
No Oversight. Generally, tax districts don’t have community involved groups overseeing anything. That means they decide what to do with your funds.
Long Term Debts. If the tax district is not managed well then this long term debt that has to be paid back falls on the residents.
Harder to Sell. It can be harder to sell if your taxes skyrocket.
So What Questions Should You Ask so You Know, Is a Metro District Right for You?
What amenities are provided by the district?
Are these amenities paid for within your taxes or are their additional HOA’s or membership fees?
What is the projected cost of ongoing improvements?
Are their public documents including financials for the metro district?
What happens if there are shortfalls?
How big will the community be?
The reason for the last question is because if a community has lots of room to expand like Barefoot Lakes or Thompson River Ranch in Johnstown then you may see those taxes and fees go up and up. Smaller communities that are already built out may be a better bet if you are ok with a metro tax district.
If a community with good infrastructure and amenities is important to you and you can budget for your taxes or Hoa fees to go up, then maybe you are ok with a metro tax district. If you want a brand new or newer home, then you might have to be ok with a metro tax district, but you can still be choosy about which ones you buy in!
Here is the state of Colorado’s metro tax district maps.
If you are looking to buy a home in a metro tax district but still have questions, reach out at info@haleybartlett.com
