While local governments are seeing their sales taxes receipts decline they are now being faced with a double whammy. Homeowners are starting to see a realistic decline in their property tax bills.
And not a moment too soon.
The Seattle region is lowering the assessed value to realistic levels and it is saving the taxpayers some serious money as we see in the excerpt below. Because housing sales are so slow they are being forced to included foreclosures in the assessment calculations.
Of course, that is a level of madness only government can get away from. Imagine the appraiser who discounts the foreclosures that blanket a neighborhood when creating an appraisal for a bank?
But, as someone who distrusts government and how they try to get into our pockets, the lowering of taxes is a wonderful thing for overburdened homeowners. If we have to live with declining property values we deserve to pay an honest and fair tax on our homes, not an inflated assessment so the government can keep themselves bloated.
During the years of rising real-estate prices, the assessor’s office based its appraisals on property sales from the previous two to three years, a method intended to insulate official valuations from speculative price increases.
That method didn’t succeed in reflecting the market’s sharp drop-off. Early last year, the assessor’s office, following advice from the International Association of Assessing Officers, began taking into account some types of home sales that were previously dismissed as anomalies that didn’t reflect the market.
Because there were so few traditional home sales, the assessor for the first time in years factored in prices from foreclosure sales, purchases by one bank from another, and sales made by homeowners for a price smaller than their mortgage balance. That dropped assessed valuations 15 percent below what they otherwise would have been, Prins said. via the Seattle Times
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Ahh, finally. Hopefully reductions will hit my county before the state and local governments increase the levy rates.
I think appraisers should include foreclosures in some areas of the United States. If 30% of condos in a particular radius are short sales or bank owned they should be ignored? I see that example quite frequently here in Florida.
Assessed values are going down, but tax rates are going up to pay for over-budget, mismanaged local governments. In the end it may well be a wash here in Arizona.
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