If you shop for a newer home in the Denver area, you will probably see the term "metro district." It is worth understanding before you make an offer, because it affects what you pay each year.
What it is
A metropolitan district is a special local government created to pay for infrastructure in a community, such as roads, water and sewer lines, parks and sometimes recreation facilities. Developers often use them so the cost of building a neighborhood can be repaid over time by the people who live there.
How it affects you
The district raises money through bonds, and homeowners repay them through property taxes, at a rate called a mill levy. That shows up on your annual tax bill in addition to the usual county and school taxes. A home in a metro district can have a noticeably higher tax bill than a similar home outside one, even if the listing price looks the same.
Metro districts are separate from HOAs. An HOA charges dues and enforces community rules, while a metro district taxes property. Some neighborhoods have both.
What to ask
- What is the current mill levy, and can it change?
- How much debt does the district carry, and when is it scheduled to be paid off?
- What does the district maintain (parks, roads, landscaping), and will that change?
- Is the tax burden likely to rise or fall in the coming years?
- Are the required disclosures and district documents in the contract file?
Tips
Ask your agent to help you find the district's website and recent financial information. Compare the total monthly cost of homes, meaning mortgage, taxes, insurance, HOA and district assessments, and not just the purchase price.
General information only. Ask a licensed professional about a specific property.