(The Center Square) — Colorado’s Senate passed legislation Monday that would reduce residential and commercial property taxes.

Senate Bill 21-293, which was introduced just last week, would lower property taxes for single-family and multifamily housing units, renewable energy properties, and agricultural land over the next two years.

If passed, the bill would drop assessment rates for single-family and multifamily homes to 6.95% from 7.15%. Commercial properties would be taxed at a 26.4% rate rather than a 29% rate as well.

It would also expand the state’s property tax deferment system. This provision would allow property owners to defer up to $10,000 of property taxes incurred within the next two tax years until they sell their home.

The bill’s sponsors say that the legislation will help hardworking families who may be surprised by huge property tax bills because of Colorado’s rapidly increasing home values.

“Property values are rising across Colorado, and it’s imperative that we act this session to mitigate the impact for hardworking families,” Sen. Chris Hansen, D-Denver, said in a statement. “This bill will reduce certain property tax rates over the next two years, allowing us to address the rapidly changing property market in our state and provide substantial relief to the people who need it most.”

Colorado voters made the legislation possible when they overturned the Gallagher Amendment in November 2020. The amendment regulated how the state collects its property taxes. Under the law, Colorado collected 55% of its property taxes from commercial property and 45% from residential.

Since the beginning of the pandemic, home values in Colorado have shot up over 34%, according to figures from the Colorado Association of Realtors. The average home price now stands at $660,000 statewide, with the average sale price at nearly $100,000 more.

The bill will be heard next by the House of Representatives this week as lawmakers hope to adjourn sine die by Friday.