Home values may rise 25% for tax purposes

Tucson Citizen
Wednesday, February 21, 2007
Garry Duffy

Pima County homeowners next week will begin receiving property assessment notices, the basis for property taxes. They can expect valuation increases of up to 25 percent, Assessor Bill Staples says.

That could mean increased property taxes. But County Administrator Chuck Huckelberry said he thinks the Board of Supervisors likely will lower the tax rate, as it did last year, at least partly offsetting higher taxes caused by the valuations increases.

It's a lingering hangover from the red-hot real estate market of a year or two ago. That boom pushed housing prices way up. Those prices are used by the Assessor's Office in valuing the 305,000 or so residential properties in the county.

"Clearly, the sales we're using to do the valuations for 2008 occurred in 2005 or 2006," Staples said.

Homeowners won't have to pay property taxes on the valuation notices they will receive next week until next calendar year because Arizona has a one-year lag time.

Staples urged property owners to watch for valuation notices, which will look different this year.

The new notices are being mailed in white business envelopes and will contain more detailed information about the valuation process.

Past notices were on postcards. Staples said he hopes that homeowners will be on the lookout for the new format and not discard the new notices.

Doing so could hurt a homeowner's ability to appeal his valuation by the statutory April 27 deadline, he said.

The 2007 property tax bills that homeowners will see this fall will be based on valuation notices received a year ago.

But it's going to be sticker shock just the same, especially considering that homeowners have been battered in recent years with valuation increases in the 15 percent to 20 percent range - again mainly because of the record real estate market.

That's where setting of tax rates by the Board of Supervisors and other taxing entities comes in. The supervisors last year cut the primary property tax rate by 23 cents per $100 assessed valuation, which was partly offset by a 10 cent-per-$100-assessed-valuation increase in secondary taxes.

That increase was to raise revenue to operate and staff the Pima County Library system, which the county took over from the city of Tucson.

Huckelberry said another increase of 5 cents-per-$100-valuation will be needed for the library system in fiscal 2007-08, which begins July 1.

But he believes the board will want to lower the primary rate again this coming fiscal year, which would at least partly offset increases in valuation that homeowners saw last year.

But the county's share of the overall property tax bill that homeowners will see in late September is only about "25 to 30 percent of the package," Huckelberry noted.

Property tax bills in Arizona include several tax rates from various jurisdictions, such as school and fire districts, Pima Community College and the city of Tucson for city residents.

So it's way too early to begin calculating your potential tax bill for this year or next.

That's because none of the jurisdictions in the county has adopted its tax rates for the coming fiscal year, and the supervisors have not set an overall tax levy on which tax collections will be based.

This fiscal year, the owner of a $170,000 home in Tucson Unified School District paid $2,241 in total property taxes.

Staples said seniors can get some relief from the escalating values - and taxes - on their homes by applying for a freeze on the full cash value of their homes through his office.

Applicants must be at least 65 and have lived in their house for at least two years.

The program allows for valuation freezes for three years.

Staples urged that seniors who are applying for a freeze make sure to check to see that the 2008 value is greater than the 2007 value.

If that is not the case, he continued, senior homeowners could inadvertently freeze their home's value at the higher value of those years.