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Will New Sale Price of Homes Affect Local Tax Revenue?

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 / capegroup@capegroup.com
508-274-5613  Licensed in MA
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@CapeGroup  Skype: heath.coker

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Comments

I am waiting for that lead baloon to drop.  Do you mean governments may actually have to trim their budgets?  No way""""""

Posted by John Walters, Licensed in Louisiana (Frank Rubi Real Estate) over 12 years ago

I am always skeptical. The taxing folks will raise the millage, raise the taxes, generate the money they need...at the owner's expense. Trim the budget - doubtful!

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) over 12 years ago

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