Tired of high home taxes? Try sheep
With heated floors and tennis courts, a private gym and mountain views, the Canyon Point property at Gray Head is no mere ranch. But the $10.6 million home outside Telluride could soon pay the same property taxes as a humble family farm.
Gray Head is an enclave for the wealthy elite, 885 acres of luxury homes, private trails and pristine wilderness below Whipple Mountain. But because sheep sometimes graze on the property, Gray Head’s homeowners say their land should be taxed as agricultural land, at vanishingly low rates.
Take one empty lot at Gray Head. As ordinary vacant land, its owners would owe $14,391 in property taxes. But as agricultural land, its tax burden would be $51.94 per year. That’s a difference of about 28,000 percent.
Now the question of Gray Head’s tax burden is heading to court.
This summer, a county board that hears tax disputes rejected Gray Head’s petition to be taxed as purely agricultural land. The county said Gray Head’s 35-acre lots had to pay a hybrid tax — residential rates for the buildable land, and agricultural rates for the rest of the property.
But Gray Head is suing to overturn San Miguel County’s ruling. An attorney for the development says the sheep grazing is a legitimate agricultural use, and he says the homeowners have state law and reams of court cases on their side.
“This wasn’t a group of wealthy homeowners who went to the legislature saying, ‘Give us a tax break,’” said Joseph Coleman, Gray Head’s attorney. “Years ago, the agricultural community realized that if agriculture was ever going to succeed in this state, they had to offer some tax benefits to people who owned the land.”
The dispute highlights the changing face of farming and grazing in the West, where old grasslands and mesas have been transformed into boutique ranches and subdivisions. And as millionaires arrive, ranchers are driven out.
But at Gray Head, West Meadow or Sunnyside, ranchers and newcomers have found a novel symbiosis. Homeowners allow herds to continue grazing, and that grazing allows homeowners to save thousands on property taxes.
“It’s beneficial to the landowner, the rancher who owns the livestock and the land itself,” said Chayden Bray, a spokesman for the Colorado Livestock Association.
Coleman said the land had been grazed years ago, and that the new homeowners were simply carrying on the process. The development has filed grazing leases, signed letters from homeowners in support of grazing and other documents to support its case.
The county threw out Gray Head’s request for agricultural status on a technicality, saying an unauthorized rancher had engaged in “trespass grazing” on the land. Coleman said he would fight that ruling.
Ultimately, he said, Gray Head owners deserve the same tax status as full-time ranchers.
“The difficulty I have with the commission is that they think they can create a distinction between the traditional rancher and the people who make their homes available to ranchers,” he said.
But the way San Miguel officials see it, Gray Head is trying to skate through a loophole in state law to lower its tax load. And in the process, they say Gray Head is rewriting the very definition of ranchland.
For county assessor Peggy Kanter, a ranch is out toward Norwood. It is a sprawl of pasture and fenceposts where farmers and ranchers work year-round to till something of value from the soil. Ranchers don’t just fly in for ski season.
“At Gray Head, they’re not a rancher,” Kanter said. “They don’t operate 12 months a year. They’re not making their living off that land. They’re not producing anything. With a true rancher or farmer, it’s a yearly operation.”
At Gray Head, she said, owners are flouting the intention of state law to gain agricultural status. A few times a year, owners allow a herder to drive sheep across a portion of the land, and for that, they call themselves agricultural landowners, she said.
“It’s obvious that Gray Head isn’t marketed as a working ranch,” said Joan May, a San Miguel County commissioner. “It’s marketed as luxury homes. They say their land is ranch land. We say, No, they’re luxury homes.”
But ask Ernie Etchart what a ranch is, and the answer has always been Gray Head.
Before mansions and Land Rovers littered the landscape, Etchart brought sheep up to that high mesa west of Telluride. He would drive herds of 750-950 head up there in the springtime, then take them out toward Silverton, to Red Mountain Pass.
He said sheep graze the land in the springtime and then late summer, spending some 10 weeks chomping through the high grasses. Sometimes the sheep wander right up to $5 million homes; sometimes drivers must yield when the herd crosses the road.
Mostly, the sheep and the rich coexist, Etchart said.
“It’s really worked out for us, and I hope it’s still working out for Gray Head,” he said. “If it weren’t, we wouldn’t still be up there.”
Telluride Daily Planet