How Local Governments Will Not Lower Property Taxes When Property Values Drop
So your home has lost value but your taxes are not going down.
Welcome to the club.
One of my pet peeves is that we as citizens and business owners have to be elastic in our spending as the economy grows and shrinks but government can keep on spending. That seems to be the message as home values are dropping but the tax assessor is keeping the values just as high as they were before.
And if they do lower the home values to realistic numbers then they raise the tax rate so they do not have to cut back.
In an aggressive survey, The Atlanta Journal Constitution did a survey of some of the major counties in the Atlanta region and found that many homes have a higher tax value than they do in real life.
So the government is over valuing the home to keep their tax revenue at the same level. If this was the private sector this would be called theft.
In an unprecedented comparison of actual sales values vs. county tax appraisals, The Atlanta Journal-Constitution examined every residential property sale and every change in tax value in Cobb, Clayton, DeKalb, Fulton and Gwinnett counties in 2009 — about 550,000 records. The newspaper found that, for the first time, county appraisals are higher — sometimes much higher — than property is now worth, which means that tens of thousands of homeowners are being unfairly taxed ?on value their property no longer holds.
Tax appraisers have routinely refused to use actual sales to set tax values, ignoring a state law that requires them to tie their estimates to what houses are worth on the open market, the AJC investigation has found. In sum, the newspaper has exposed a deeply flawed property tax system that often inaccurately values property and leaves some residents undertaxed while forcing others to pay way too much. via the AJC
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Comment by Mark Washburn on 8 December 2009:
There is a very interesting thing happening in Florida right now as it relates to property valuations. Florida enacted the Save our Homes Amendment to limit changes in valuations for homesteaders to 3% annually. This amendment stuck it to 2nd homeowners as they were not elligible for a homestead exemption.
Now with the dramatic decrease in property values across Florida, non-homesteaded property values are adjusting with the market, and homesteaded properties are limited to a 3% reduction in value.
Comment by Bob on 8 December 2009:
I’m not sure what is going on in the rest of my state of California, but in Contra Costa County, the County Assessor proactively adjusted property taxes and I must say that they did a very good job getting close to actual value. Based on what I paid for my home in 2006, it was a nice surprise to get the revised tax bill in the mail.
Comment by Jeff Smith on 9 December 2009:
Wouldn’t just make an awful lot of sense to set the assessed value at the sales price and force the politicians to adjust the tax RATE? Make them go on record for raising taxes instead of hiding behind some usually inaccurate estimate!
Comment by Tom Royce on 9 December 2009:
Now you are being logical Jeff. Asking the politicians to be above board and honest about their motivations as opposed to hiding behind the assessor? Ain’t gonna happen.
Comment by Portland Real Estate on 9 December 2009:
We have always known that those numbers are flawed, but I still think that it is too soon to call it “theft”, it is a huge process to revalue all of the homes in an area and then get the tax records set right because everything is with different agencies in different locations on paper, nothing is completely digital. Also, the private sector steals from the general public all of the time, they just have to be crafty about it by either buying politicians or calling it a “fee”.
-Tyler
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