The Maricopa County Assessor's Office says the new round of valuations to be mailed around Feb. 1 will reflect the slump in the housing market. The office, however, would not disclose specifics and emphasized that not all property owners will see a decline in assessed value. Some neighborhoods have held values better through the downturn.
"In some parts of the Valley, values will be flat or maybe increase a little bit," said Paul Petersen, an assessor's spokesman. "It depends on where you are located."
The valuations are important
because they are used to calculate the taxes that support such
things as cities, school districts, community colleges and other
taxing districts.
Consumers hoping for an immediate property-tax reduction will
likely be disappointed. Though the valuations come out in
February, the payments are billed in 2009.
The lag time is built into the system so property owners can
appeal the valuations. Petersen said appeals have increased 25
to 30 percent during the housing boom. The combined median
prices of new and existing homes increased 55 percent in the
Valley from 2004 through 2006, according to Arizona State
University's Realty Studies program.
But the market turned locally and nationally, and home prices
fell in more than half of the Valley's ZIP codes in the first
eight months of this year, according to The Republic's
latest Valley Home Values study.
The valuations being mailed in February will reflect sales data
from the third quarter of 2006 to the same quarter of this year.
Of course, the market may change a great deal by the time
taxpayers write a check for those assessments next year.
"We're always playing catch-up," Petersen said.
Many Valley homeowners, though, are keenly aware of neighborhood
price moves, and they balk when they pay taxes based on a market
snapshot that's a year old. There was so much aggravation about
how values were set during the boom that three initiatives were
filed this year with the goal of controlling property taxes. A
November poll of county residents indicated that 31 percent
think home values are a little too high and 24 percent call
prices much too high, according to WestGroup Research of
Phoenix.
The valuation notices provide two figures: the full cash value
of a house and its limited-property value. The assessor says the
full cash value is the current market value of the land and
house. It is used to figure secondary taxes for such things as
bonds, budget overrides and special districts.
The limited value is the basis for calculating primary taxes
that are used to run government and schools. It is based on a
formula set by law and can't exceed the full cash value.
The full cash value does not necessarily represent how much the
property is worth or could be sold for. That is set by the
marketplace.
Kevin McCarthy, president of the Arizona Tax Research
Association, said his group advocates that state and local
governments reduce tax rates rather than pushing for initiatives
it believes would damage public financing. But he said new,
reduced valuations in Maricopa County will not reduce angst over
the higher tax bills of the past two years.
"Even if there are small reductions, I don't think it will do a
lot to alleviate people's fears that taxes will continue to
increase," he said.
Framing subcontractor Bob Larson successfully appealed a
valuation notice for land he bought in Desert Mountain in north
Scottsdale. He bought the land for $105,000 in 2003 but said his
first tax bill showed a value of $288,000.
He filed the affidavit of value from the sale with the assessor,
and the value on the land was reduced to the sale price. He's
not sure what happened but assumed it was a technicality: A
pricey golf membership attached to the land was removed before
he bought it.
"It wasn't any huge financial hardship, but it's very
unfortunate when you buy a property after that appeal time has
expired," he said.