Do out-of-state sellers pay Colorado's 2% withholding on a Broomfield home?
According to Broomfield listing agent Nick Ahrens, Colorado's 2% withholding on out-of-state sellers is not a tax you lose — it's a prepayment against any Colorado income tax on your gain, it never exceeds your net proceeds, and if the home was your principal residence you can usually sign it away at the closing table with nothing withheld at all.
By Nick Ahrens | August 10, 2026
Nick Ahrens, a Broomfield listing agent with The Apollo Group at eXp Realty, tells sellers who have already left Colorado that the "2% tax" they keep reading about is neither 2% of everything nor a tax they simply forfeit. It's a withholding — a deposit the state collects at closing in case you owe Colorado income tax on the sale — and most of the North Denver owners he helps sell from out of state end up owing nothing and having nothing held back.
Here's the fear that lands in my inbox every week: "I moved to Texas last year, and now Colorado wants to keep 2% of my Broomfield sale price just because I don't live here anymore." The reality is narrower, more refundable, and usually avoidable. Let me walk you through exactly how it works.
What Colorado's 2% withholding actually is
Colorado law (C.R.S. 39-22-604.5) tells the closing agent — the title company running your settlement — to hold back money from a nonresident seller's proceeds and send it to the Colorado Department of Revenue. The state does this because once you've moved away, it has no easy way to collect income tax on a Colorado home sale if you happen to owe any. So it collects up front, then the real number gets sorted out later.
Three details do the heavy lifting:
It's the lesser of two numbers. The title company withholds either 2% of the sales price or your net proceeds on the settlement statement — whichever is smaller. On a $900,000 Anthem home, 2% is $18,000, but if you're walking away with less than that after your mortgage payoff and costs, the withholding is capped at what you actually net. Net nothing, and nothing is withheld.
It only applies to sales of $100,000 or more. Below that, there's no withholding at all.
It's triggered by your address, not your feelings about the state. If the IRS Form 1099-S or the closing disbursement paperwork shows a non-Colorado address for you, the title company is required to treat you as a nonresident seller and run the withholding analysis.
At closing you'll complete a one-page form called the DR 1083 ("Information with Respect to a Conveyance of a Colorado Real Property Interest"). If money is actually withheld, the title company remits it on form DR 1079 and files both within 30 days of your closing date. You don't chase any of that paperwork — the settlement agent does. Your job is knowing which box on the DR 1083 fits you, because the right box can take the withholding to zero.
When you can skip it entirely
This is where most out-of-state sellers exhale. The DR 1083 lists several affirmations — statements you sign under penalty of perjury — and any one of them stops the withholding. The ones that matter for a Broomfield owner:
The home was your principal residence right before you sold it. If you're selling and moving in the same stretch — the house is still your primary home at closing — you sign the principal-residence affirmation and nothing comes out.
No Colorado income tax will be due on the sale. This is the affirmation that saves people who already moved. It leans on the federal Section 121 exclusion, which lets you exclude up to $250,000 of gain if you're single, or $500,000 if you're married filing jointly, as long as you owned and lived in the home for at least two of the last five years. If your gain fits under that cap, no Colorado tax is due, you sign, and the 2% never leaves the table.
There are no net proceeds. If your payoff and costs eat the whole check, there's nothing to withhold from.
You're still a Colorado resident at closing. Signing the residency affirmation ends the analysis before it starts.
Here's the nuance that trips people up. The principal-residence affirmation asks whether the home was your principal residence immediately before the sale. If you moved out months ago and rented the house in the meantime, that specific box may no longer fit — but the "no Colorado tax due" affirmation still can, as long as you're inside that two-of-five-year window and Section 121 covers your gain. When Nick Ahrens lists a home for an owner who has already relocated, the DR 1083 is one of the first documents he flags, so the title company knows which affirmation you're signing before the settlement statement is even drafted.
One honest caveat: this is the mechanics of the withholding, not a stand-in for your own tax numbers. If you converted the home to a rental and took depreciation, or your gain runs past the Section 121 cap, part of the sale can be taxable — and that's exactly when some withholding is appropriate. Your CPA or the title company's closing team can confirm your specific affirmation. If you're also unwinding a home in the state you left — say, selling in California as you move here — state withholding and the Section 121 exclusion work much the same way, and I break that down in my guide to California capital gains when you sell and move to Colorado.
If it does get withheld, here's how you get it back
Say your sale is genuinely taxable — a Broomfield rental you've held for years, or a gain above the exclusion — and 2% comes out at closing. You have not lost that money. It's a prepayment sitting in your Colorado income tax account, exactly like the withholding on a paycheck.
When you file your Colorado income tax return (the DR 0104, with the nonresident schedule), you report the sale, calculate what you actually owe Colorado on the gain, and credit the amount that was withheld. It goes on the line for real-estate and nonresident prepayments — not the W-2 line — and if the withholding was more than your real tax bill, Colorado refunds the difference. On a lot of sales the actual Colorado tax runs a few hundred to a couple thousand dollars against a five-figure withholding, so the refund is real money coming back.
A quick Broomfield reality check on the dollars. The Denver-metro median close price sat at $605,000 in July 2026, and Anthem and Anthem Highlands run well above that, with median sale prices in the $900,000-plus range. With 30-year fixed rates at 6.69% as of early August 2026, buyers are payment-sensitive and your net proceeds matter more than ever. Knowing the "2% tax" is usually a non-event means you price and plan around your real walk-away number, not a phantom haircut. If you want a clear read on that number before you list, start with what your Broomfield home is actually worth today.
Frequently Asked Questions
Is Colorado's 2% withholding a tax I lose when I sell from out of state?
No. It's a prepayment against any Colorado income tax you might owe on the gain — not a separate tax, and not a fee. You reconcile it on your Colorado income tax return and get back anything you didn't actually owe.
I already moved out of Colorado. Can I still avoid the withholding on my Broomfield home?
Usually, yes. If you owned and lived in the home for at least two of the last five years and your gain fits under the Section 121 exclusion ($250,000 single, $500,000 married), you can sign the "no Colorado tax due" affirmation on the DR 1083 and nothing is withheld.
How much is actually withheld on a Broomfield home sale?
The lesser of 2% of the sales price or your net proceeds. On a $900,000 Anthem sale that's an $18,000 ceiling, but it's capped at whatever you actually net after your payoff and closing costs — and it drops to zero if an affirmation applies.
What forms are involved, and who files them?
You complete the DR 1083 at closing. If anything is withheld, the title company remits it on the DR 1079 and files both within 30 days — you don't handle that. You later claim the credit on your Colorado DR 0104 return.
Does the 2% apply if I'm selling a Broomfield rental or second home?
More likely, yes. Investment and second homes don't get the principal-residence affirmation, and depreciation recapture or gain above the exclusion can create real Colorado tax. Even then it's still a prepayment you reconcile on your return, not a permanent loss.
Your out-of-state closing game plan
The short version: Colorado's 2% withholding is a refundable prepayment capped at your net proceeds, and if your Broomfield home was your principal residence, the right affirmation on the DR 1083 usually takes it to zero. The sellers who get blindsided are the ones who learn about the form the day they sign — not the ones who plan the affirmation before the home hits the market. Picking a Broomfield listing agent who has closed out-of-state sales before is half the battle; the title company and your CPA handle the rest.
If you want to run your actual numbers — what you'll net, whether an affirmation zeroes out the withholding, and how to coordinate it with the title company from another state — call or text me at 949-230-3625, or email me at NickAhrensRealEstate@gmail.com. I'll walk you through your specific situation.
About Nick Ahrens
Nick Ahrens is a Colorado real estate broker with The Apollo Group at eXp Realty, specializing in the Anthem and Baseline communities of Broomfield (80023). With 15+ years in the business and 350+ career closings, he helps North Denver sellers and relocating buyers navigate pricing, timing, and the path to closing. Connect with Nick at youranthemhome.com.
