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Will property tax ever go down?
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Question:
Will property tax ever go down?Answer:
The handling of property tax differs from state to state.In some states, e.g. California, a sale defines the new tax value.
In some states, when the market declines, the assessor will correct downwards. I have seen this in Utah and in Nevada, e.g. for 2008, my Las Vegas properties were corrected downwards and my annual property tax goes down by about $50 each.
In California, proposition 13 limits how much property tax can go up. I'll give you an example of one of my rentals:
Purchased in 1999 for $295k. Assessed to be worth $295k in 1999 and taxed accordingly.
In 2007, this property was worth $700k, but the tax assessor says $338,419.
In 2008, this property is worth $600k, but the tax assessor says $345,187.
The tax assessor has no reason to reduce the assessment because proposition 13 prevented the assessed value to be anywhere close to the market value. Unless the house price crashes by over 50%, property tax will continue to go up.
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