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Understanding Property Tax Changes: Impact on Assessed Value and Market Growth

This article explores the changing dynamics of property tax, focusing on the relationship between taxable assessed value and real market value. With a capped growth rate of 3% and an average growth of 6.98% in residential properties, the annual adjustment poses significant implications for new properties and rapidly improving neighborhoods. The long-term trends and proposed constitutional amendments by the Governor’s Task Force aim to address these shifting valuations. Discover the historical context through 2008 and learn about planned legislative reforms to better align property taxation with current market realities.

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Understanding Property Tax Changes: Impact on Assessed Value and Market Growth

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Presentation Transcript

  1. Property Tax

  2. Changed Property Ratio Taxable Assessed Value Real Market Value Growth Capped at 3% Average Growth 6.98% (Residential) • Each year, this ratio grows smaller • The aggregate county-wide ratio determines the amount of Taxable Assessed Value for new properties.

  3. How it Works • Rapidly improving neighborhood • Stagnant neighborhood

  4. Changed Property Calculation

  5. Changed Property Ratios

  6. Assessed vs. Market Values Historical thru 2008 Long term trend

  7. Macro-Economic

  8. Legislative Solutions • Governor’s Task Force on Comprehensive Revenue Restructuring • Formed November 2007 • Report Issued Fall 2008 • Senate Committee on Finance and Revenue • Hearing April 2009 • Introduced three proposed Constitutional amendments

  9. Proposed Constitutional Amendments • JSR 35 – Proposes a revision to the constitution relating to ad valorem property taxation • Repeals M5 and M50 • Adds back M5 criteria for permanent tax rate and allows for a rate change by a vote of the people • JSR 36 – Proposes a change in tax assessed value at sale or transfer of existing property. • Minimum TAV = 50% of RMV • Maximum TAV = 75% of RMV • JSR 37 – Proposes a change in exception valuation of property to 75% of RMV on sale or transfer.

  10. Residential: • Adjust Taxable Assessed Value upon Construction or Sale

  11. What’s Next?

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