How Would Properties Fare Under New Tax Rate?

The County Executive released what he anticipates the 2013 property tax rate to be this past week. As a result of changes to state law in 2005, the County and municipalities have to adjust millage rates following a reassessment to be revenue neutral. Subsequent tax rate hikes have to occur in a separate action. Recall that last December the County hiked millage rates from 4.69 to 5.69; with new values countywide were expected to rise 35% (that’s still what the County’s assessment webpage shows) but a newspaper article said the County is basing its new tax rate on a 20% increase in value.

How will that tax rate, if it holds, affect tax bills? Property owners can use the millage rate to calculate it against the 5.69 rate in place. Assuming no change to the homestead exemption that allows a homeowner to reduce the assessment by $15,000 for County tax purposes, a home assessed at $100,000 would apply the millage against $85,000. This year, the County tax bill for that home would be $483.65. If the assessment rose to $120,000 for 2013, the homeowner would take the homestead exemption (now the County assessment would be $105,000) and apply a millage rate of 4.73 against it and the tax bill would be $496.65, a $13 increase.

We went back to the data complied for our most recent report and applied the proposed millage rate against our 100 sales. We actually had a scenario in the report which estimated the County rolling the millage rate to 4.69 mills, so the 4.73 rate is not much different. Of the 100 sales, 57 properties would pay more in County taxes, while 43 would end up paying no more or less. The 4.73 rate moved one property in our sample (in quartile 3) from paying $2 less to breaking even.