Tuesday, March 13, 2012

Property Taxes Dropping?

More Americans whose homes have fallen in value may finally see that break on their property taxes that they’ve been waiting for, according to a USA Today analysis.

As home values have fallen, many Americans have wondered why their property taxes have stayed the same or even risen.

"People say, 'Hey, my house value went down. How about my tax bill going down?' But it doesn't work that way," Robert Ross, chief assessment officer for McHenry County, Ill., told USA Today.

Many states base their tax assessments on home values from three, six, or up to 10 years ago. This protects home owners from seeing rapid increases in their taxes if home values dramatically increase, but as the USA Today article points out, it also means that home owners can see lengthy delays to any tax cuts when home values drop.

That help explains why cities, counties, and school districts are still “collecting about 20 percent more in property taxes than they did in 2006, when home values were one-third higher,” the article notes.

But some home owners may soon see their property taxes reflect their current home’s assessment. For the first time since 1995 — and only the third time in 40 years — property tax collections have fallen below the inflation rate, dropping 0.9 percent in 2011, according to USA Today.

Source: “Property Tax Collections to Start Downward Trend,” USA Today (March 12, 2012)

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