King County property tax going up as home prices fall

From the Seattle Times:

By Keith Ervin

Seattle Times staff reporter

Declining property values will bring tax relief to some King County homeowners this year, but voter-approved levies and bonds will mean higher taxes for others.

Assessed values nudged slightly higher in some areas while falling steeply in others, County Assessor Lloyd Hara reported Thursday.

In Seattle, where voters last year approved two school levies and construction bonds and home values rose a tad, the tax bill on a typical $453,300 house will rise by $324, or 8 percent, to $4,379.

Assessed values fell so much in Burien — more than 9 percent — that the typical homeowner's taxes will drop 5.6 percent, or $210 this year, to $3,572 on the average $276,500 house even though voters agreed to pay a higher levy rate for schools.

Tax bills, based on property values as of Jan. 1, 2010, will be mailed to property owners Monday. Payments are due in two installments, on April 30 and Oct. 31. Tax bills in Snohomish County are expected to be mailed later this month.

Bills are going out as numerous homes are in or near foreclosure and Zillow.com calculates one-third of Seattle-area mortgage holders owe more money than their houses are worth.

"We really haven't seen a market like this since the Great Depression," Hara said. "A lot of people can't remember the history, and we're kind of making our own history in this marketplace. ...

"It's still a pretty volatile market because there are many foreclosures that are out there. Things haven't stabilized yet."

Hara said he expects many property owners to be surprised, as they were in the past several years, to see their property taxes go up as the value of their homes goes down.

That "counterintuitive" reality, he said, is primarily the result of new voter-approved levies and bonds.

Voters approved 44 tax increases in 2010, 38 of them for schools, according to the assessor. Other taxing districts collecting more money range from Si View Metropolitan Park District to the cities of Shoreline and Black Diamond to the King County Library System.

Even without voter-approved levies, Washington's "budget-based" tax system allows cities and other taxing districts to boost tax collections without voter approval by 1 percent a year plus tax on the value of new construction. New construction has declined dramatically.

The tax rate is adjusted up or down to prevent sharp fluctuations in tax bills as real-estate values rise or fall. 

Countywide, tax collections will increase 3.3 percent after a year in which total assessed value dropped 3.4 percent. The drop in value was modest compared with the previous year's 11.6 percent plunge.

As jurisdictions have raised their tax rates to offset falling values, some have bumped against statutory limits on the rate for special-purpose districts and combined local rates.

The King County Flood Control District, the lowest-priority taxing district in the county, avoided losing its entire $36 million tax stream this year by paying eight small fire districts $3.2 million to keep their levies down.

Non-voter-approved taxes will drop 3.6 percent this year countywide, according to Hara's office.

Average tax bills will drop in the Vashon Island School District by 2 percent. The biggest rise among school districts in the county was in Tukwila, up 10.9 percent.

Homeowners' average tax payments will go up more than commercial property owners' payments, because commercial values fell faster than residential values last year, Chief Deputy Assessor John Arthur Wilson said. In some years, commercial property taxes go up faster than residential taxes, he said. 

Comments

[real estate]

I have to admit I'm not so keen with the fact that Washington's "budget-based" tax system allows cities to boost tax collections without voter approval, even if we're talking about small changes.

[christopher Pia]

Interesting article, I am not sure how I came across an real estate article, but interesting read.

[christopher Pia]

Interesting article, not sure how i came across this but interesting read.