As sale prices of homes across the country adjust to the latest value levels, many local communities will be asked to address the question of how this affects tax assessments. This may be the newest issue for the economy. In many areas, the assessed value (not the same as appraised value) is not equal to the highest sale of each property. With that said, there is already a "buffer" between the sale price and the assessed price that the taxing authority uses to value the home for tax purposes.
In my town of Falmouth, there were only 36 sales in 2007 that were described in the listing as being "under assessed value." With only 36 out of over 17,000 selling below assessment, there is little chance that our tax department will need to adjust many values based on sales below assessment. Of course there are some areas where foreclosed values will affect the value of neighboring properties, but for the most part, assessments are not at a true 100% of the value of a home. The reality is that the rapid appreciation of real estate over the previous few years didn't allow tax rdepartments to complete new assessments at the higher levels. So even though owners may be losing paper equity, there is less chance that tax departments are going to have assessments that need to be adjusted much.
Update: I just found an article about how this will affect West Palm Beach real estate.
Heres the link:
http://www.mortgagenewswatch.com/newsviewer.php?ppa=%3Aqsvv%5F%5CkifkttlRVgb%216C%29bfen%5F%21 Titled Taxable value of homes, businesses plummets throughout PBC .
Heath Coker, Associate Broker
Robert Paul Properties
www.CapeGroup.com / firstname.lastname@example.org
508-274-5613 Licensed in MA
Its a beautiful day on Cape Cod!
@CapeGroup Skype: heath.coker