Franklin homeowners and others across the state just received their assessment notices in the mail. The average increase in Franklin was 4.5%. Possibly good news if you’re selling. Not so much if you’re staying.
There’s a sense that assessments should go up if market values are increasing. That’s the way it should work, right?
In a January of 2012 when the housing market was quite different, Richard Moore of the Lakeland Times wrote a lengthy but very interesting piece demonstrating that despite the housing woes years ago, assessments and property taxes went up in Wisconsin even though values went down.
Here’s an excerpt:
Property values plummet but average tax bills don’t
Property values are continuing their dramatic downward slide in Minocqua and in other northern Wisconsin property-taxing entities, and the region is no exception as the nation struggles with a devastating housing market implosion that just doesn’t seem to have an end in sight.
And here’s another thing that’s not exceptional about the region – for the most part, even as people lose as much as 50 percent of the value of their homes, and sometimes more, average property tax bills are staying put right about where they were.
In financial parlance, it’s called a tax roll up. That is to say, as property values decline, first market and then assessed values, and ultimately with it the total assessed value of property that can be taxed, municipalities traditionally “roll up” millage rates (per $1,000 of equalized value) to compensate for the eventual decline on the other side of the equation. So as values decline, rates go up, and levy revenues remain stable.
Critics of the maneuver, using old-fashioned language, call this a tax increase. That is the only logical way to describe it, they say, when, for example, a person paying $1,500 in taxes on a $150,000 home starts paying the same $1,500, or a little less, when the home’s value drops by a third to $100,000.
Suddenly, instead of paying 1 percent of the value in taxes, the taxpayer is paying 1.5 percent of the property’s lower value.
And there are plenty of those. Since the beginning of the housing slump, home prices have dropped 22 percent nationwide. And, according to the National Association of Realtors, the median price of a single-family home fell 4.7 percent in the third quarter of 2011, compared to the third quarter of 2010.
In Minocqua, the drop is as fast and furious. From 2011 to 2010, the township suffered an 11.8 percent decline in its equalized value – the state’s certified annual estimate of the market value of all residential, commercial, manufacturing and personal property in a taxing district – and some observers predict an even bigger drop after the town’s 2012 revaluation of properties, all making for a potential drop in values of as much as 30 percent in just two years.
In Minocqua and in many municipalities, however, as home prices slide, the total amounts levied have not been reduced by as much, and in many municipalities not at all, and it has begun to spark something of taxpayer revolt, such as a sharp spike of assessment appeals in Miami, Fla.
The logic is, if inflated market values lead to inflated property tax levels, which lead to inflated government spending, then keeping inflated spending at current levels when values decline keeps taxes inflated as well.
What’s more, critics contend, while government officials and assessors don’t have a crystal ball and can’t be faulted for the nation’s housing collapse, government nonetheless has a stake in such bubbles because they raise lifeblood revenues to ever higher levels, and in fact help bolster bubbles by forcing banks to offer cheap credit and more liberal mortgage criteria.
Along the way governments add services and expand, and officials are able to camouflage artificially high revenue streams by bragging that they lowered millage rates. Often enough, the critics contend, the public buys into it, and even collaborates by passing referendums to evade imposed revenue caps and levy limits, or to authorize expensive capital projects.
You see, they will find a way to fleece you no matter what.
Advantage Credit Counseling Service, Inc. (ACCS) is an agency that provides private, confidential budget, credit counseling as well as a special debt management program.
They dedicated a very informative page on their website to reassessments. Some of the key highlights:
- As many as 60 percent of properties across the country are over assessed, according to the National Taxpayers Union.
- Homeowners can lower the assessed value of their home by filing an official appeal with the assessment office.
- However, only 2 to 3 percent of homeowners actually attempt an appeal, and usually only 20 to 40 percent of those appeals are successful.
So what’s it like to even attempt to fight an appraisal?
If the property owner feels the assessment is too high, he or she can appeal,but it must be done in a timely manner.
Written or verbal notice of intent to file an objection must be provided to the board of review’s clerk at least 48 hours prior to the board’s first meeting. A taxpayer who waits until property tax bills arrive in mid-December has no recourse. Also, property owners who refuse an assessor’s written request by certified mail to view the property cannot contest their assessment.
Municipalities hold an “open book,”during which assessments may be reviewed and the assessor questioned. The assessment roll must be open for a minimum of two hours prior to the board of review’s first meeting. An individual who believes a property is not fairly assessed must file an objection during these two hours.
In making the decision to appeal, the taxpayer should be aware that the assessor’s value is presumed correct unless proved otherwise by factual evidence presented at the hearing. Also, small percentage differences in value are not sufficient to warrant a change.The property owner is expected to establish what he or she feels is the fair market value of the property during the appeal.
Essentially, it’s a hot mess. The odds are clearly against the homeowner.
Finally, here’s a portion of a column from the Dallas Morning News:
Yeah, I’m nervous. I’m sitting in my property tax protest hearing, and I’m outnumbered. Five of them. One of me.
My stomach is queasy. My voice sounds weak.
Then the nerves are replaced with little anger pangs. I don’t like what I’m seeing.
Read the entire column here.
So, can you fight your reassessment? The answer is yes. However, there’s a big but.