Ask Axios: Why falling home prices rarely mean lower taxes
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"If homes have lost value, does this mean assessed value for property tax purposes will go down, taking real property tax obligations with it?
- "I made myself laugh due to the odds against this." — Suzan Kelsey Brooks, West Des Moines
Context: We reported last week that there was a nationwide increase in the number of homes losing value year-over-year in October.
- That includes over half in the DSM metro, according to a new Zillow report.
The fine print: Zillow's data comes from sales records of the real estate marketplace company, which is less comprehensive than the records used to assess property values for tax reasons.
- Iowa assessors determine changes by comparing the current assessed value and the sale price. They also consider the housing market based on two years of sales to estimate future values.
State of play: Home assessments generally rise, with an average of 22% in Polk County in 2023 and about 10% this year.
- Assessed values decreased by an average of 2.9% in 2011 and increased only 0.9% in 2013, during an economic recession in the state, Polk County deputy assessor Paul Humble tells Axios.
Yes, but: Individual tax bills might not have gone down, even then.
- That's because the final bill depends on several factors that typically change each year, including local government tax rates and the percentage of a home's value that's taxed after the state's "rollback" is applied.
The intrigue: Humble used his personal property as an example, showing that his nearly $2,700 property tax bill decreased by $20 after the 2011 assessment, when his home's assessed value dropped $7,200 from the previous year.
Yes, but: Humble's taxes increased by $94 the next year, even though his home was still assessed at the same value.
- And they increased by another $110 after the 2013 assessments, even though the home's value dropped by another $2,400.
The latest: Public school districts in DSM, WDM, Ankeny and Southeast Polk approved referendums in November, which will be reflected on future tax bills.
The bottom line: Keep laughing, Suzan.