Like most Realtors I get asked to do research immediately after an assessment on property values by people who are concerned about a rise in the valuation of their homes. I’m happy to do so and
I’m no different than anyone else in being concerned about the taxes I must pay on my own home. I don’t really worry too much about it though. Here’s why.
The actual tax that you pay after a new assessment is not likely to rise proportionately to the increase in your assessment. What you really need to keep your eye on is the tax rate and that won’t be determined until after budgets are set by the city and the county. The budgets are then used to determine the rate but taking the total value of all the properties and setting the rate to cover the budgets.
State law requires that counties assess all properties at least once every eight years. In a relatively stable or stagnant situation the counties avoid the expense, effort and concern about the valuations and may go the full time until they must do a new valuation. However, there has been little stagnant in Durham in recent years so this assessment took place after only three years. Some neighborhoods have benefited greatly from Durham’s Renaissance and home values have gone up dramatically. According to data analyzed by Realtors Property Resource (RPR) the median increase in the value of Durham city homes has increased about 10% in each of the last three years, which is pretty spectacular.
This means a lot of additional equity for homeowners but does not necessarily result in a 30% increase in taxes because the budget is not likely to increase as dramatically. When the mayor proposes a bond issue of $95M dollars for school construction as Mayor Schewel recently did, it does not hit the budget all at once. The very nature of the bonds is that they spread the cost over many years and the bonds are issued only as needed.
In theory, the new assessment should reflect the market value of a home at the time they are done. However, keep in mind that it will not be as accurate as an appraisal by a professional appraiser or a careful market analysis by a Realtor. The further away from the assessment you get, the less likely it is to be an accurate reflection of the market value of a particular house. Even close to when the assessment is done, I never use it to recommend a price to a client although it is useful as a reality check on whatever I come up with.
If you really think your assessment is out of whack, there is a process for appealing it, but do it with some data in hand. Use the comments section or contact me if you have questions.