Falling Home Values- Lower Property Tax?

Falling Home Values- Lower Property Tax?

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Quite simply, no.

Property tax law differs from condition to condition, but general assumptions can be created through the nation. As property values fall, some homeowners might assume their taxes goes lower by using it. This really is generally and not the situation, while your taxes might have to go lower just a little, they will not be plummeting in the same rate your house value is.

Here’s a reason why. Property tax is dependant on county need and residential value road repair, libraries, schools, and fire departments all need money to function (regardless of how much your house is worth) that is where your home tax dollars part of. Every year these different organizations estimate how much cash they require in next season (the precise percent increase is generally capped by voters), time will be divided one of the qualities within the county.

Again, that’s very simplified.

Your house’s value is necessary once the assessor sets the tax rate depending on how much all of the homes inside your county count against how much cash is required by public services. Aubrey Cohen from the SeattlePI puts it best:

“…if your library district needs $100,000 this season and it is district includes a total property worth of $100 million, its tax rate is going to be $1 per $1,000 of assessed valuation, meaning an invoice of $200 on the $200,000 home.”

Here’s where it all fits in place, and why house values don’t mean lower taxes:

“If [the library] needs the equivalent money the coming year, but values declined 10 %, the assessor would enhance the tax rate to $1.11 per $1,000 of assessed valuation.”

Meaning your property is worth less but you’ve still got to pay for exactly the same amount (or even more) to help keep public services ready to go. One of the ways your taxes could decline is that if your unique neighborhood was hit hard with falling prices yet others remained steady or elevated. Your house’s value against others inside your county may be the figuring out element in the way your property tax fluctuates.

While Cohen’s example concentrates at Seattle’s tax code, his points continue to be well accepted and usually universal. Should you thought the cut in your house’s value was bad and searched for lower taxes to become your silver lining, I personally don’t like is the bearer of not so good news but it is most likely and not the situation and can also be the alternative.

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