Property Values Plunge Yet Property Taxes Are Increasing

Property Values Plunge Yet Property Taxes Are Increasing

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2008 will go down as a year of contrasts.

By late Spring gas prices began to surge eventually topping $4 per gallon by summer. Later in the fall, gas prices fell, dropping below $1.50 in some areas.

home market valuesHousing prices also tumbled, so much so, that homes valued at one rate in 2004 were worth less than that in 2008. In fact in some markets home prices fell to levels not seen since around 2000 or 2001.

What hasn’t fallen are property taxes which spiked earlier in the decade as tax administrators saw a ready supply of new tax revenue suddenly made available home values increased. Homeowners were shocked to learn that their housing values which suddenly increased by 30-50 percent or more were taxed at a higher rate, driving up property taxes by thousands of dollars in some cases.

The Wall Street Journal (Monday, January 5, 2009, pg. A3) reported in an article titled, “Call Grow to Cap Property Taxes,” that some jurisdictions are still raising taxes even as home values drop. In some states the amount of taxes paid as percentage of income continues to rise, putting added pressure on consumers.

Leading the way with the highest property taxes in the nation is New Jersey where the media property tax for 2005-2007 was $6082 according to The Tax Foundation. That translates into a figure of 7.1% for the average New Jersey household, but it clearly doesn’t reflect the impact that higher taxes has on people living on a fixed income. In many northern New Jersey communities it isn’t uncommon for residents to face an annual property tax bill topping $12,000 or $1000 per month. For the homeowner with limited resources this burden is unsustainable.

Home prices fell an average of 20% across the country in 2008, but that isn’t stopping some communities from raising property taxes even as the recession deepens. Citizen groups in some states are banding together to fight the increases making sure that property tax relief measures are put on the state ballot.

State leaders appear to understand the gravity of the problem and are, in some cases, calling for a statewide cap on property tax increases. On January 1st, New York City residents were hit by a seven percent property tax boost, but even Gov. David Paterson is realizing that the increases are too much is working with legislative leaders to support a 4% statewide cap.

Homeowners do have other weapons in their arsenal when it comes to fighting property tax increases. Besides the ballot box, individual assessments can be challenged if the homeowners does his homework. This may mean finding out what evidence the tax man used to come up with a higher valuation including property description and location, building a case to present reasons why your taxes should be lowered, meeting with the tax assessor informally and, if your personal appeal still hasn’t worked, filing a formal appeal with the county board.

The country’s current economic climate may not be enough of a reason for you to appeal your taxes. What every homeowner has to do is make a personal appeal to have their taxes lowered while working with citizens groups to stop or cap tax increases at the ballot box.

Adv. — Your property taxes aren’t the only bills you’ll want to reduce in the months ahead.  Let SayLowerBills.com help you find ways to reduce your medical expenses, housing and debt obligations. Take control of your finances in 2009!

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