PROPERTY TAXES UP AS HOUSE PRICES FALL
April 25, 2007
Property taxes will keep rising nearly everywhere for homeowners even as house prices are falling in many parts of the country, according to a USA Today analysis of government data.
A key reason: Despite the downturn, the market value of millions of homes still exceeds their assessed value used for tax purposes.
Other reasons few tax bills will shrink:
- Many local governments where home values have softened -- including the Washington, D.C., suburbs of Northern Virginia -- are increasing tax rates to offset lower assessments; the city of Fairfax, Va., for example, plans to raise its tax rate by 4.5 percent to offset a 3 percent decline in house values.
- Property taxes often are based on market values that are several years old; New Hampshire revalues property once every five years, most recently in 2006 when prices peaked.
Among the few who may benefit from falling values: people who bought recently at the market peak, only to see prices drop.
- Ventura County, Calif., is looking at 20,000 home sales since the end of 2005 to see whether any owners deserve a tax cut.
- The median home price in Ventura County is $567,000, down 5 percent from its peak in March 2006, according to DataQuick, which tracks prices.
"To get a tax cut, you have to buy a home at the peak and have it lose value quickly," says Ventura County Assessor Dan Goodwin. "You can't enjoy double-digit increases in your home value and then expect a tax cut when the market dips."
Source: Dennis Cauchon, "Property taxes up as house prices fall," USA Today, April 25, 2007.
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