Navigating Aspen Colorado's Real Estate Transfer Taxes (RETT): What You Need to Know

Avant Garde Aspen

Aspen, Colorado, is a place of natural beauty, cultural richness, and, for those who invest in its real estate, potential financial prosperity. However, before you dive into the Aspen real estate market, it's crucial to understand the Aspen Real Estate Transfer Tax (RETT). This unique tax, approximately 1.5% of the closing price payable by the buyer, has specific beneficiaries and some complexities you should be aware of. In this blog post, we'll demystify the Aspen RETT and help you determine whether it applies to your property transaction.
 

Understanding The Aspen Real Estate Transfer Tax (RETT) System

Aspen has two distinct RETTs, each serving specific purposes. The Aspen RETT is a local tax imposed on real estate transactions within the city limits of Aspen. The tax rate typically stood at around 1.5% of the total property sales price. The unique feature of the Aspen RETT is its dual purpose in benefitting the community:
 
1. Affordable Housing Fund (1.0%): One portion, equivalent to 1.0% of the total tax, is dedicated to the affordable housing fund. This revenue helps support the creation of affordable housing options in Aspen, addressing the critical need for housing in the area. This RETT was approved by City of Aspen voters and became effective on July 1, 1989. Its main objective is to address the housing shortage in Aspen. It includes a provision that allows the exclusion of the first $100,000 of consideration from taxation. Additionally, all existing affordable deed-restricted housing units are exempt from this tax. Like the 0.5% RETT, it also has a sunset provision, which, unless extended by voter approval, will expire after December 31, 2040.
 
2. Wheeler Opera House (Approximately 0.5%): The other portion, around 0.5% of the total tax, contributes to the support of the Wheeler Opera House. This historic cultural venue in Aspen relies on these funds to continue providing exceptional entertainment and cultural experiences to residents and visitors alike. This tax was initiated on May 8, 1978, with the support of voters. Its primary purpose is to fund the renovation, reconstruction, and maintenance of the Wheeler Opera House and support the visual and performing arts in Aspen. Initially, it had a sunset provision, but voter approval has extended it through December 31, 2039. Notably, in November 2021, Aspen voters expanded its use to include funding for arts programming at the Red Brick Building and removed the previous $100,000 cap on arts grants funded by this tax.
 

Responsible Parties for RETT Payment

The responsibility for paying RETT falls on the purchasing party, which is typically the buyer. Failure to pay the RETT can result in the City of Aspen filing a lien against the property to ensure eventual collection. To obtain clear title, buyers, either individually or through a title company, should submit the following documentation for consideration:
 
  1. A completed computation or exemption form.

  2. The signed and dated deed that will be filed with the Pitkin County Clerk and Recorder's Office.

  3. A TD-1000 if the transaction is a for-consideration conveyance.

  4. Any additional documents necessary to support exemption requests, such as operating agreements, trust documents, death certificates, etc.

Exemptions from RETT

The City Municipal Code, Section 23.48.040, outlines exemptions from the imposition of either RETT. Some general exemptions include:
 
  • Transfers involving government entities or charitable organizations.

  • Gifts with no consideration other than love and affection or charitable donations.

  • Property transfers due to death, wills, or decrees of distribution.

  • Termination of joint tenancy without additional consideration.

  • Conveyances made without consideration to confirm, correct, modify, or supplement a prior transfer.

Determining if the RETT Applies to Your Property

Understanding whether the Aspen RETT applies to your property is essential to budgeting and planning your real estate transaction. Here's a quick guide to help you determine if the RETT is a factor:
 
Properties Typically Subject to RETT:
 
-Five Trees: Yes, if annexed to the City of Aspen.
-Maroon Creek: Yes, if annexed to the City of Aspen.
-Aspen Highlands: Yes, if annexed to the City of Aspen.
-Aspen Highlands/Glen Eagles Drive Area: No RETT.
-McSkimming/Eastwood: Yes, if located in the City of Aspen.
- Knollwood: Yes or no, depending on the property's location (north or south of Hwy 82).
 

Properties Not Subject to RETT:

-Meadowood: No RETT.
-Mountain Valley:*No RETT.
-Red Butte Dr: Yes, if located in the City of Aspen.
-Red Mountain: Yes for the lower part in the City, no for the upper part in Pitkin County.
-Willoughby Way: No RETT.
-Red Mountain Rd: No RETT.
-Shady Lane: Yes or no, depending on the individual property address.
-Snowmass Village: No RETT, but there is a 1.0% transfer tax for properties in the Town of Snowmass. Additionally, the Snowmass Base Village has an extra surcharge to this transfer tax.
 

Contact Information for Further Inquiries

If you have questions or need more information about the Aspen RETT, you can reach out to the respective departments:
 
-Aspen Community Development Department (City): Phone: 970.429.2764, Email: [email protected]
-Pitkin County Community Development Department (County): Phone: (970) 920-5526, Email: [email protected]
 
Navigating the Aspen Real Estate Transfer Tax is a critical aspect of any property transaction within Aspen's city limits. While it adds an extra cost, it also contributes to the community's affordable housing initiatives and cultural richness. By understanding whether the RETT applies to your property and seeking guidance from local authorities, you can make informed decisions and enjoy the benefits of owning real estate in this stunning mountain town. Whether you're a buyer or a seller, this knowledge will help you navigate the Aspen real estate market with confidence. We are also available to be your trusted resource, so contact us today if you have any further questions about RETT or Aspen’s real estate transfer tax.
 

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