I was prepared for this eventuality when, as I've recently posted, my HELOC was "restricted" due to the fall in my home's value. I was fully prepared to see the assessed value of my house reduced over 2008, and logically assumed my taxes would be reduced proportionately.
Ah - no - doesn't look like THAT'S gonna happen. How silly of me.
The assessed value of my home (a 10 year old condo) fell a whopping 67%. To be clear, the building value went up a few dollars ($29), but the land value was reduced by almost 70%.
Here's the hard numbers: I paid $220,000 for my house in 2005. For 2008 the assessed value was $212,500. For 2009, that value is now $126,600. The TAX value is figured at 35% of assessed value, so my taxes for 2008 were figured on $74,400 and for 2009 will be figured on $44,300. See? Makes sense, then that the taxes I will pay in 2009 should be less.
The problem arises when you factor in a tax cap which increased 2007 taxes by only 3%. I don't have the actual tax numbers yet that I will pay for 2009, but here is their (the county's) example provided to prepare me for perhaps paying MORE in taxes despite a 67% drop in value.
A home valued in 2007 at $200,000 had an assessed value of $70,000 (that 35% thing) and taxes of $2,240 that with the 3% tax cap were actually $1,224. For 2008, that same home was devalued to $150,000 with a 35% assessed value of $52,500 and taxes of $1,680 with a 3% tax cap were actually $1,261 - an INCREASE of $37 despite a 25% drop in value.
Is it just me, or is something wrong with this picture? Stay tuned.
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