tractor
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Post by tractor on Feb 27, 2011 18:13:37 GMT -5
This may seem like a strange topic, but I got my property tax assessment yesterday, and they lowered my assessment by 20%, this is on top of the past two years with a total assessment down by 25%. I would be fine with holding it the same, but now that it's gone down, the local schools and county will really be hurting for funds next year. I really don't mind paying to support the schools, senior citizens, police & fire, ect. Has anyone else seen a big drop in their taxable values?
I was joking with my neighbor this morning about it and told him I was going to go in and complain to the tax board that they lowered it too much, and me and all my neighbors wanted them raised back up again. After he looked at me kind of strange, he pointed out that if I really wanted to help out, I could always send them more than they are asking for, at least it would be voluntary, instead of mandatory. He assured me that they would keep it.
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Deleted
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Post by Deleted on Feb 27, 2011 18:16:57 GMT -5
Your neighbor is right.
Housing values are dropping. It is nice that your taxing entity is recognizing this. Not all do.
Send a check if you feel guilty. Otherwise, it is a small payback for the drop in housing value.
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tractor
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Post by tractor on Feb 27, 2011 18:22:08 GMT -5
I'm in Michigan, and things are tough. I know most people don't like to pay taxes, but I really don't mind supporting things like education, as those around here can use all the "learnen" they can get. It just seemed strange to me that they dropped so much at one time, I suspect there will be more millage requests in the near future.
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swamp
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Post by swamp on Feb 27, 2011 18:56:09 GMT -5
they'll still get their money. your taxable value has gone down, but the municipalities will adjust the tax rate so they still get the amount of revenue they need to operate. You're not off the hook.
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iono1
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Post by iono1 on Feb 27, 2011 19:18:51 GMT -5
This doesn't necessarily mean your taxes are going down. Assuming the same budget as last year, they'll only go down if your house went down at a greater decrease than the rest of your municipality (muni).
Here's how property taxes work. I'll keep it simple, so the numbers are not realistic, but you should get the point. Say the budget is $1,000,000 and total assessed property values are $5,000,000. In order to meet the budget the muni has to charge each homeowner a tax rate of $200 per $1,000 of assessed value to get to that $1 million. Now if you're assessed at $50,000, you'll pay $50 x $200 =$10,000. Now lets say the muni drops everyone's assessment 20%. They still have to collect $1,000,000 in taxes, but the now the total assessments are $4,000,000. So the only thing that changes is the tax rate. Now in order to generate a million dollars in revenue, the muni has to charge $250 per $1,000 of assessed value. So now with your new assessment of $40,000 you pay the same $10,000 in taxes: $40 x $250.
Now the muni can lower your assessment and still raise taxes. Say they raise the budget to $1,600,000. With $4,000,000 in total assessed values, the new tax rate will be $400 per $1,000 of assessed value. If your $50,000 assessment with a $1,000,000 budget cost you $10,000 a year, your $40,000 assessment with a $1,600,000 budget will now cost you $16,000 a year.
Let's go back to the original premise. Say the budget stays at $1,000,000 and the town dropped the total property values by 25%, making total assessments at $3,750,000. Now the town's tax rate will be $267 per $1,000 of assessed value. If your property was only reduced 20% to $40,000, your taxes will go up to $267 x $40=$10,680, an increase of $680. Likewise if the muni lowered total property values by only 15%, but you got a 20% reduction then they'll have a tax rate of $235 per $1,000 of assessed value ($5,000,000 x.85 =$4,250,000; $1,000,000 /$4,250 =$235). Now on your new $40,000 assessment you'll pay $9,400 in taxes, a decrease of $6,000.
I know I threw a lot of numbers out there. The bottom line is that an assessment decrease can mean a property tax decrease, increase or you end up paying the same taxes. It all depends on how different the budget is from one year to the next & whether your assessment decreased higher or lower relative to assessments in the rest of your municipality.
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Deleted
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Post by Deleted on Feb 27, 2011 20:12:56 GMT -5
I understood NONE of that, iono1. Definitely too many numbers there.
But I will say that even though my assessed value seems to be decreasing, my property tax seems to be stable. So you most likely right.
Millage for things like school are probably different.
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tractor
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Post by tractor on Feb 28, 2011 9:25:45 GMT -5
Interesting, I'll have to keep an eye on the actual tax bill that will come this summer. I live in a rural area, so no water, sewer, trash pick up, etc. I'm sure we support the volunteer fire department, and county sheriffs patrol, but other than that, our services are limited.
FWIW, I really don't care about the lower assessed value, I don't plan on selling anytime soon.
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Deleted
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Post by Deleted on Feb 28, 2011 10:31:04 GMT -5
We're in Arkansas (or should I say TAX-arkansas). Our real estate assessment stayed the same, and they raised the mill levy. So, this year it's a $200 increase in our taxes. Another not so cute thing this weird place is doing is increasing the value of used cars.....so we now pay more for our personal property taxes also. The county has pulled this stunt for the past 2 years.
Please, someone tell me why we decided to move here.....
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iono1
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Post by iono1 on Feb 28, 2011 10:48:56 GMT -5
I understood NONE of that, iono1. Definitely too many numbers there. But I will say that even though my assessed value seems to be decreasing, my property tax seems to be stable. So you most likely right. Millage for things like school are probably different. That's the problem-they make taxes so difficult at all levels. For income taxes, it's so bad the government expects the citizens to hire someone to do their taxes. That's why most people don't mind e-filing. I finally gave in this year & e-filed, paying $18 for the privilege of making their job easier. If you want to get your property taxes lowered you have to understand how to appraise a house or hire someone who does. When my muni reassessed in 2006 they created more inequities than existed before. There were plenty of sales within 2 blocks of my house & they still got my assessment wrong. I had to write an appraisal showing both the time trends & the comparable properties used by the town were incorrect. I used to work as an appraiser for the agency that monitored the assessors in the state, so I knew the business. The average person would have either had to pay an appraiser to fix the problem or just accept the higher tax bill. The worst part was that the town was using a system, developed by my former employer, that is not really appraising. It was developed by computer system staff that based everything on relative costs instead of using defined market adjustments.
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Clever Username
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Post by Clever Username on Feb 28, 2011 12:04:56 GMT -5
Assessments are just a bit of a shell game, I don't think it pays to stress too much about them.
If the whole city's values drop by 20% it does not mean that the city's expenses drop by 20%.
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