Here’s what you need to know about the relationship between property taxes and declining markets:
- Open market value reflects what a property could currently sell for, while assessed value, which determines your property taxes, tends to lag far behind.
- When the market declines, lagging assessed values can mean homeowners now have higher property taxes in contrast with their declining open market value.
- The experts at Gill, Denson & Company can help you protest your assessed value with the county, ensuring fair valuation and potentially lowering your tax bill significantly.
The Real Estate Market & Your Property Taxes
In the ever-changing real estate market, homeowners must understand the intricate relationship between property values and taxes. Open market value is the price a property could sell for in the current market, while assessed value is determined by the local tax assessor and used to calculate property taxes. While open market value can fluctuate quickly, assessed value takes more time to catch up with market changes. It’s dependent upon when the county reassesses values, local tax rates, and existing credits, such as the homestead exemption. Eligible homeowners also benefit from an appraisal cap, limiting annual increases to no more than 10%.
What Happens to My Property Taxes In a Declining Market?
Appraisal districts are often far behind the curve on decreasing values in declining markets. In addition, they use inaccurate mass appraisal methods, which often overestimate values to the benefit of the district. This means some homeowners may find themselves with property taxes higher than the value their home would actually sell for. This situation can negatively impact their equity and hinder their ability to sell the property at a profit or break even. Given that property taxes are typically assessed annually, homeowners may not see the impact of a declining market on their property tax bill until the following year.
How to Reduce Your Property Taxes
One effective way to mitigate the impact of property taxes, especially in fluctuating markets, is by protesting the county’s assessed value of your property. It’s best to do this annually to combat market changes and account for any additions or improvements to your property. Gill, Denson & Company offers specialized property tax protest services, handling the entire process on your behalf from start to finish. We utilize strategic approaches to ensure fair valuations, potentially resulting in significant savings on your annual tax bill. In 2022 alone, we helped 83% of our clients save an average of $1,309 on their property taxes!
Get started with Gill, Denson, & Company today to work on lowering your property tax bill! Our team of experts is ready to help you get the tax breaks you deserve.