Home values are falling. Should property taxes be falling, too?
July 16th, 2009 by Allison JordanI’ve noticed a lot of news lately regarding homeowners attempting to lower their property taxes due to reduced home values. My first instinct was, “Sign me up!” After all, my home’s value dropped more than 55% in the last few years. On one hand, this could mean thousands of dollars in savings, especially in areas like mine where the decline in home values is significant. On the other, what will it mean for publicly-funded services like fire departments, law enforcement, schools, and libraries?
Perhaps nothing. As the amount of property tax collected decreases, local governments can raise the tax rate to make up for it. Wait, I could actually end up with a tax increase this year?
“Taxes are based on property values times [the tax rate]. We could have declining values but make up for it by raising the rate,” said Bill Donegan, the property appraiser for Orange County, Fla., which includes my hometown, Orlando. (source CNNMoney.com)
But wait, there’s more. He goes on to say that the decline in home values has been so great, it’s unlikely that any increase in tax rate would offset the lower assessments. To make up for it, local governments can raise fees and even taxes in other areas. In other words, the money is going to come out of your pocket eventually.
In the meantime, if you want to challenge your property tax assessment, eppraisal.com can assist. Here are some steps to follow:
- Know your home’s property value and compare it to the tax assessment value.
- Verify the information on record (number of rooms, square footage, etc.)
- Research neighborhood property values
- Get an appraisal from a licensed professional appraiser
- Submit your case to the county tax assessor
Tags: appraisers, home values, property tax
July 16th, 2009 at 1:02 pm
The unfortunate side effect for a state like Florida (where we don’t have a state income tax) is that schools will be (are being) hit the hardest by people’s rush to lower the assessed value of their home.
You can renegotiate waste management contracts only so often and libraries have mostly fixed costs, so education (which offers many extras beyond it’s official charter) becomes the slaughterhouse of funding cuts. In years past, it was shared textbooks, less arts, no sports…coming up will be auditorium classes, no arts, no special ed, no physical ed (and much less).
Maybe they could create an apartment tax that would put some of the burden on renters if they have children.
July 18th, 2009 at 12:39 am
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July 21st, 2009 at 7:38 am
[...] Estate of Things » Blog Archive » Home values are falling. Should property taxes be falling, too? “As the amount of property tax collected decreases, local governments can raise the tax rate to make up for it. Wait, I could actually end up with a tax increase this year?” [...]