It may be the only upside to the economy downfall. Property tax bills are in the mail, and many property owners will owe less money this year.
For the past several years people have been angry. While their home values plunged, their taxes stayed the same, or were even higher than the year before. But this year, it’s a different story for many people.
It’s because the taxes you’re paying on your home today are based on rates two years ago — that’s why it’s taken so long for relief.
“You’ve seen your taxes dramatically go up over the past couple of years — and now your valuations are starting to go down,” says Troy Reeves with Remax Alliance Group Realty.
The average property tax valuation is down 3.7 percent from last year. This years tax assessments are just now reflecting the plunge in housing prices over the past few years.
He says the property tax formula can be confusing for a lot of homeowners.
“They’ve got to put a value to a property one or two years in advance. And they truly don’t know how the market’s going to be affected. And so they’ve got to in a sense, guess.”
But that doesn’t mean everyone’s property tax will go down. Several cities and special districts had to raise taxes to make up for cuts in their budgets. That will undoubtedly make it tough for homeowners who are already struggling.
“We’ve had this issue over the last couple of years — taxes jumping up on houses sometimes 30 to 40 percent in a two year period — and they don’t expect that,” says Reeves.
Property values are assessed every year, and the bills arrive 18 months later, so this year’s property tax valuations are based on 2008 numbers, the height of the real estate free-fall.