Even though home values have plummeted by a third, property taxes are increasing: welcome to the Great Middle Class Squeeze. You might think that with home prices off by 30% or more since the housing/credit bubble popped in 2006, property taxes would have declined by a similar percentage. But you'd be wrong: they've gone up. As if the massive reduction in home equity wasn't enough of a blow to the Middle Class, they're also paying higher property taxes.
Though house prices have declined roughly 30% nationally since the 2006 peak of the housing bubble, property taxes have continued their decade-long rise, jumping $45 billion (over 10%) since 2008.
Local governments are responding to declining revenues by jacking up all taxes and fees. To counteract sharp declines in property values, municipalities are raising their property taxe rates, squeezing more out of properties even as they drop in value. Though there are local variations, the result is the same: property taxes are rising.
In southern Washington, the rate jumped from $10.06 to $11.60 per $1,000 of assessed value--a leap of over 15% in one year.
Even as assessed valuations slumped by over 13% annually, property tax revenues statewide increased 2.1% to $8.8 billion--a $181 million increase to taxpayers. Though Washington state has limits on property tax increases, local government's property tax rates do not rise or fall with assessed value--they're set by budget requirements. So falling prices do not translate into lower property taxes. (more)
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