Understanding Tax Revaluations

Understanding tax assessments and tax rates can be a challenge in a reassessment year! If you are looking at the information for a property in the Multiple Listing and you are trying to figure out what the taxes will be, CAUTION! 

The amount listed under “Assessed Value” could be the new 2009 tax valuation or it could be the previous value depending on how the agent is representing it. If it is the new ’09 value but list a tax rate, it has to be the ‘08 rate right now.  If you try to calculate your taxes for this year with the new value and the old rate, you could be way off!! The tax RATES won’t be set for 2009 until June or July, so there is no way to determine what the taxes will be if you use the new ’09 assessed values. Your best bet is to see what the owner of that property actually paid in taxes in 2008 in hard dollars and then assume the taxes will be somewhat higher in ’09 as they usually are every year. 
Here is an example: In MLS, listed Tax value is $300,427 and Tax rate is listed as $1.8090/$100.  A buyer might assume that they would take the above tax rate and apply it to the stated tax value. Doing so in this case, the taxes would be $5,435!! BUT!   The taxes paid for this house in 2008 were actually $3,686 – a 50% tax increase in one year?? Hardly! Make sure you use the right Tax Value with the right Tax Rate for the year! The tax value for the rate of $1.8090 in this example was $203,783 (the value assigned at the last valuation in 2005) – making the taxes paid $3,686 in 2008. For previous years, the actual taxes paid on this property  increased by 3.8% from ’06 to ’07 and 7.9% from ’07 to ’08. It was the RATE that was increased resulting in that much increase in your taxes paid. So you can estimate that for 2009 actual taxes paid would increase somewhere in that neighborhood but definitely NOT 50%! 
The best way to know if you have the right information is to talk to your agent. She/he can find out for you what the real tax costs to you might be on a specific property you are considering in the MLS.   Or you can email or call us if you don’t have an agent yet and we will assist you in understanding how to read the information in MLS! But, make sure you have the right numbers or you could overestimate what the taxes really are!


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