Why Property Taxes Matter More at the Luxury Level
When you’re buying a $500,000 home, a few hundred dollars in annual property tax difference is a rounding error. When you’re buying a $3 million estate in South Denver, that same mill levy gap can translate to $5,000–$15,000 per year — enough to influence which side of a county line you choose to live on.
South Denver’s luxury real estate market straddles two counties: Arapahoe County to the north and Douglas County to the south. Communities like Cherry Hills Village, Greenwood Village, and Centennial sit in Arapahoe. Castle Pines, Castle Rock, and much of Highlands Ranch fall in Douglas. And some areas — particularly along the C-470 corridor — have boundaries that surprise even long-time residents.
This guide explains how property taxes work in Colorado, how the two counties compare, and what luxury buyers should know before committing to an address.
How Colorado Property Taxes Work
Colorado’s property tax system is unique in several ways that benefit homeowners:
The Gallagher Amendment (and Its Repeal)
For decades, Colorado’s Gallagher Amendment kept residential assessment rates artificially low relative to commercial property. Voters repealed Gallagher in 2020 (Amendment B), giving the legislature direct control over residential assessment rates. As of the 2025 tax year, the residential assessment rate is approximately 6.7% of actual value — though this has fluctuated as lawmakers balance budgets.
TABOR
Colorado’s Taxpayer’s Bill of Rights (TABOR) limits how much revenue government entities can collect. This means even when property values soar, mill levies often adjust downward to keep total revenue within TABOR limits. Some districts have “de-Bruced” (voters approved exemptions from TABOR revenue caps), allowing them to keep windfall revenue from rising assessments.
The Mill Levy Stack
Your total property tax bill isn’t determined by a single rate. It’s the sum of multiple overlapping mill levies from various taxing entities:
- County government — funds county services, roads, courts
- Municipality — city services (if you’re in an incorporated area)
- School district — typically the largest single component
- Fire district — fire and emergency services
- Water/sanitation district — if applicable
- Metro district(s) — common in newer developments; funds infrastructure debt
- Regional Transportation District (RTD)
- Urban Drainage
- Other special districts — library, parks, etc.
A single property might be subject to 10–15 different levies that add up to its total mill rate.
Douglas County Property Taxes
Douglas County has long been regarded as a tax-friendly county for homeowners, and the numbers bear this out. The county government’s own levy is relatively modest — around 14–16 mills for unincorporated areas. The county benefits from a strong commercial tax base along the I-25 corridor (Park Meadows, Lone Tree’s RidgeGate development) that subsidizes residential services.
School District Impact
Most of Douglas County’s luxury areas fall within the Douglas County School District (DCSD), which carries a mill levy of approximately 48–52 mills. DCSD is well-funded and highly rated, consistently ranking among Colorado’s top five districts. Some northern Douglas County properties near Highlands Ranch may fall in Littleton Public Schools, which has a similar levy range.
Metro District Warning
Here’s the critical caveat: many newer Douglas County communities — particularly in Castle Rock, Sterling Ranch, and RidgeGate — have metro district overlays that can add 30–60+ mills to your total bill. These districts were created to finance infrastructure (roads, water, sewer, parks) during initial development. A property in a heavy metro district area of Castle Rock might have a total mill levy of 120–140 mills, far exceeding anything in Arapahoe County.
However, established luxury communities like the Village at Castle Pines have fully paid-off or minimal metro district obligations, resulting in total levies in the 70–85 mill range — among the lowest in the South Denver luxury market.
Typical Douglas County Luxury Tax Bills
| Home Value | Assessment (6.7%) | Low Levy (75 mills) | High Levy (130 mills) |
|---|---|---|---|
| $2,000,000 | $134,000 | $10,050 | $17,420 |
| $3,000,000 | $201,000 | $15,075 | $26,130 |
| $5,000,000 | $335,000 | $25,125 | $43,550 |
Arapahoe County Property Taxes
Arapahoe County’s government levy is slightly higher than Douglas County’s — around 16–19 mills for the county portion. However, Arapahoe County also benefits from substantial commercial development (Denver Tech Center, Centennial Airport industrial areas) that helps keep residential burdens manageable.
School District Impact
Arapahoe County luxury homes fall primarily in two districts:
- Cherry Creek School District (CCSD) — serves Cherry Hills Village, Greenwood Village, and parts of Centennial. Mill levy around 52–56 mills. CCSD is consistently Colorado’s top-performing large district and commands a premium in home values.
- Littleton Public Schools — serves parts of Greenwood Village, Centennial, and Columbine Valley. Mill levy around 48–52 mills. Also highly regarded.
Fire Districts
South Metro Fire Rescue serves most of the Arapahoe County luxury corridor and carries a levy of approximately 12–14 mills. This is comparable to Douglas County fire districts.
Typical Arapahoe County Luxury Tax Bills
| Home Value | Assessment (6.7%) | Low Levy (78 mills) | High Levy (95 mills) |
|---|---|---|---|
| $2,000,000 | $134,000 | $10,452 | $12,730 |
| $3,000,000 | $201,000 | $15,678 | $19,095 |
| $5,000,000 | $335,000 | $26,130 | $31,825 |
Which South Denver Communities Are in Which County?
This catches many buyers off guard. Here’s the breakdown:
Arapahoe County
- Cherry Hills Village — entirely in Arapahoe County
- Greenwood Village — entirely in Arapahoe County
- Centennial — entirely in Arapahoe County
- Columbine Valley — Arapahoe County
- Littleton (most of it) — Arapahoe County (some portions in Jefferson or Douglas)
- Englewood — Arapahoe County
Douglas County
- Castle Pines (city) — Douglas County
- Castle Pines Village — Douglas County (unincorporated)
- Castle Rock — Douglas County
- Highlands Ranch — Douglas County (unincorporated)
- Lone Tree — Douglas County
- Parker — Douglas County
- Sedalia / Perry Park — Douglas County
The Surprise Borders
Some areas straddle county lines in ways that aren’t intuitive. Parts of Lone Tree near RidgeGate are technically in Douglas County but feel like an extension of Greenwood Village. The Highlands Ranch community, while in Douglas County, is served by Littleton Public Schools in its northern sections — a district headquartered in Arapahoe County.
County-by-County Comparison for Luxury Buyers
| Factor | Douglas County | Arapahoe County |
|---|---|---|
| County Levy | 14–16 mills | 16–19 mills |
| Total Levy Range | 70–140 mills | 78–95 mills |
| Metro District Risk | High (newer areas) | Low (established areas) |
| Best-Case Scenario | Lower than Arapahoe | More predictable |
| School Districts | DCSD, Littleton | Cherry Creek, Littleton |
Strategies for Minimizing Property Taxes on Luxury Homes
1. Avoid Heavy Metro Districts
Before making an offer, request the complete mill levy breakdown from the county assessor’s office. Identify every metro district overlay and understand whether the bonds are near maturity (levies will drop) or recently issued (decades of elevated taxes ahead).
2. Challenge Your Assessment
Colorado allows homeowners to protest property valuations every two years during the reassessment cycle. For luxury homes, assessor valuations can be significantly off — comparable sales data is thin at the $3M+ level, and assessors sometimes rely on inappropriate comps. A successful protest on a $4 million home that reduces the assessed value by even 10% can save $2,000–$3,000 annually.
3. Consider Unincorporated Areas
Properties in unincorporated Douglas County (like Castle Pines Village) avoid municipal mill levies entirely, which can save 4–7 mills. The trade-off is fewer city services, but at the luxury level, homeowners often provide their own services through HOAs and private contracts anyway.
4. Look at the Senior Exemption
Colorado offers a senior homestead exemption that exempts 50% of the first $200,000 of actual value from property tax. While $200,000 is a small fraction of a multi-million-dollar home, it still reduces the tax bill by approximately $500–$700 per year for qualifying seniors.
5. Monitor Legislative Changes
Colorado’s property tax landscape has been in flux since the Gallagher repeal. The legislature has adjusted assessment rates multiple times, and ballot initiatives continue to appear. Luxury homeowners should stay engaged — a 1% change in the assessment rate on a $4 million home shifts the annual bill by $3,000–$5,000.
The Bottom Line
For luxury home buyers in South Denver, the county line matters — but the specific taxing district matters more. A well-positioned Douglas County property in an established community like Castle Pines Village can offer some of the lowest total tax burdens in the metro area. But a Douglas County property in a new development with heavy metro district debt can cost more than anything in Arapahoe County.
Arapahoe County’s luxury communities — Cherry Hills Village, Greenwood Village, Columbine Valley — offer more predictable and moderate tax burdens because they’re established areas without metro district overlays. The trade-off is a slightly higher county levy.
The smartest approach: compare specific addresses, not just counties. Request the full mill levy certificate for any property you’re considering, and factor the annual tax bill into your total cost of ownership. On a $3 million home, the difference between the best and worst scenarios in South Denver can exceed $10,000 per year.
Need help understanding property taxes for a specific South Denver address? Explore our South Denver luxury community guides for detailed community profiles and tax information.
Frequently Asked Questions
Are property taxes lower in Douglas County or Arapahoe County?
Douglas County’s base county levy is lower (14–16 mills vs 16–19 mills), but total property taxes depend on your specific metro districts, school district, and special districts. Established Douglas County luxury areas like Castle Pines Village can have total levies as low as 70–75 mills, while newer developments with metro district debt can reach 130–140 mills. Arapahoe County luxury areas typically range from 78–95 mills total.
How much are property taxes on a $3 million home in South Denver?
At Colorado’s 6.7% residential assessment rate, a $3 million home has an assessed value of $201,000. With total mill levies ranging from 75 to 130 mills in South Denver, annual property taxes would range from approximately $15,075 to $26,130. Cherry Hills Village and Castle Pines Village tend toward the lower end, while newer Castle Rock and Highlands Ranch metro district areas tend higher.
What is a metro district and how does it affect my property taxes?
A metro district is a special taxing district created by developers to finance infrastructure like roads, water systems, parks, and utilities in new communities. The district issues bonds to pay for construction, then levies additional property taxes (often 30–60+ mills) on homeowners to repay those bonds over 20–40 years. Metro districts are common in newer Douglas County communities and can significantly increase your total property tax bill beyond the base county and school district levies.
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Are property taxes lower in Douglas County or Arapahoe County?
Douglas County’s base county levy is lower (14–16 mills vs 16–19 mills), but total property taxes depend on your specific metro districts, school district, and special districts. Established Douglas County luxury areas like Castle Pines Village can have total levies as low as 70–75 mills, while newer developments with metro district debt can reach 130–140 mills. Arapahoe County luxury areas typically range from 78–95 mills total.
How much are property taxes on a $3 million home in South Denver?
At Colorado’s 6.7% residential assessment rate, a $3 million home has an assessed value of $201,000. With total mill levies ranging from 75 to 130 mills in South Denver, annual property taxes would range from approximately $15,075 to $26,130. Cherry Hills Village and Castle Pines Village tend toward the lower end, while newer Castle Rock and Highlands Ranch metro district areas tend higher.
What is a metro district and how does it affect my property taxes?
A metro district is a special taxing district created by developers to finance infrastructure like roads, water systems, parks, and utilities in new communities. The district issues bonds to pay for construction, then levies additional property taxes (often 30–60+ mills) on homeowners to repay those bonds over 20–40 years. Metro districts are common in newer Douglas County communities and can significantly increase your total property tax bill beyond the base county and school district levies.