Tax Rate Increase = Higher Tax Fee’s?
Not necessarily. The county generates revenue for services such as fire, school, street maintenance and much more, through taxes. To calculate your tax fee they use what is known as the millage rate. Here are a few helpful resources:
Why is My Rate Increasing/Decreasing Now?
In January of each tax year, all taxable real property in NC must be listed. Properties must be reassessed at least every 8 years. Properties may be reassessed more frequently.
During an increase of real estate sales and construction, tax assessment seems to occur more frequently. Property values may increase during these upturns. As this occurs, the millage rate may stay the same, but the revenue to the county will increase due to property values increasing. However, when the real estate market heads south, counties may choose to halt assessments on property. The reason is simple; counties can not afford to lose revenue. Here again, they must reassess at least every 8 years.
Even though property values may change, the county still needs to meet its budget. A new tax rate must be established by July 1 of each year. If the county determines that the current millage rate will not satisfy the budget, then there will be a need to increase the millage rate. If they can not meet their budget, there may be a need to reduce or eliminate services.
More About Millage Rate
Each county usually has its own rate based upon the cost of services it provides. For example, Jackson County, NC had a rate of .28 mills (or 28/1000 = .0028), as of December 2015. So, if your property value is $200,000, multiply by .0028 and your taxes will be $516.
Let’s say home sales in an area have been below the assessed value of the previous years. This should cause the assessor to reexamine current values. Now, let’s say your new assessment declines from $200,000 to $140,000 (that’s -30%). Your tax fee will go down, if the millage rate stays the same. However, the county still needs to keep its revenue to pay for the services it provides. How do they do this?
In order to continue to provide services, the county will need to make up the lost revenue by making a tax rate increase. If the tax is increased to .36 mills, your tax fee for $140,000 is now $504 (near the $516 on your previous assessment of$200,000).
Basically, if property values drop, the tax rate must be increased to continue to cover the cost of services provided by the county and/or city. If the property value rises, the millage rate may stay the same. Seldom are taxes lowered. Yet this “additional” revenue may help to cover the cost of inflation.
My Property Tax Value is To High/Low
Many homeowners feel the value of their property by the county tax assessor may be to high or to low. If it’s to high, you may be paying to much in taxes. If it’s to low, the tax will be lower, but it may have an affect on how a potential buyer views the value of the property. This may hinder asking a higher listing price for your home. What can you do?
You may be able to file a dispute with the tax office. However, there is usually a deadline for filing any disputes. So if you have any questions, you need not delay in getting all your information together. What you’re trying to find is the Fair Market Value. How is this determined?
Determining Fair Market Value
Market Value is not determined by what we “feel” a home should go for. It may not matter for what your neighbors home sold. There are many variables, as well as the principle of substitution. If you are not familiar with these it may prove prudent to hire a professional to assist you in determining your home value. Your Real Estate Professional may be able to assist you with this.
Most Real Estate Agents will do a CMA (Comparative Market Analysis) for you. They do this by looking at similar properties that have recently sold. They then make adjustments based upon many factors (age of home, number of bedrooms, updated kitchens, size of home, bathrooms, finishes, lot size, location, etc). These calculations should then give a fair estimate of the market value of your home. However, there is no crystal ball that will show you an exact number. Still, based upon years of experience and living in the region, your Broker/Agent should be able to give you a figure to help you determine a Fair Market Value.
A Double Edged Sword
Taxes are seldom a fun subject. Everyone wants to pay the least they can. When we get an assessment, we usually say, “There’s no way my home is worth that much!” However, when we go to sell, we want it to be assessed at the highest amount and insist it’s worth every penny, if not more.
Taxes help provide the services we want. Yet, we’d like to not have to pay any taxes. But, like our parents used to tell us, “You can’t have it both ways.
If you would like help with your property taxes and you live in Cashiers, Glenville areas, contact Rick.
NOTICE OF DISCLAIMER:
The information provided on this page is for informational purposes only. Its sole purpose is to help individuals to better understand how property tax works. The resources are provided to assist in better understanding property tax and to give general assistance in those that may be seeking tax relief. Individuals using such data do so at their own risk. They are advised to seek professional guidance and assistance through their tax advisers, state and/or local tax resources.
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