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Denver overbilled property tax on hundreds of affordable homes

Some homeowners in Denver, who had no idea they bought affordable housing, were told they'd be forced to sell the homes they've been in for years. The next unpleasant surprise? They've been overtaxed for those homes this entire time.

Denver’s city government plans to issue refund checks to the owners of hundreds of affordable homes who were accidentally charged too much property tax.

The average refund check will be about $250, according to city finance officials.

The Denver assessor’s office says it overvalued 287 homes last year that belong to the city’s troubled affordable housing program. Another 94 homes were overvalued in 2016.

PREVIOUS: People in Denver forced to sell affordable housing they didn't know they bought

“Once this issue was brought to the city’s attention, we looked into each property,” city finance spokeswoman Courtney Law told 9NEWS. “We notified these property owners by mail and told them that we would process refund checks for them. Those are expected to be mailed in April.”

The homes in question have price caps enforced by the city, designed to keep them affordable for buyers who have incomes low enough to qualify.

If the appraiser’s office sets those homes’ values the way they do for any other home on the market, the value can easily exceed the maximum sales price—resulting in a higher property tax bill to the owner.

This problem is compounded by the fact that several homeowners have complained that they bought the price-controlled homes without knowing they were in the program.

The paperwork for the affordable housing program has been overlooked or even missing from the documents the buyer signed at closing in some cases.

Two lawyers told 9NEWS that people in that situation might want to think about not depositing their refund checks, in case a court might see it as a gesture that the homeowner accepts the fact that their home is in the price control program.

Qualifying homeowners who belong in the designated affordable homes can go ahead and cash the checks—they simply overpaid on property taxes.