Increased taxes due to higher home valuations

Yuma Sun
Saturday, October 13, 2007
James Gilbert

The large increase many Yuma County residents are seeing on their 2007 property tax statement is the result of a combination of increased home valuation from two years ago and having to pay more for voter-approved bond measures, according to county officials.

County Treasurer Karen Fritz explained that while no new bond measures appeared on a taxpayer's statement this year, and some tax rates actually went down, most homeowners are still having to pay more due to higher property valuations.

"When the property valuations keep being raised every year, your taxes will go up every year," Fritz said. "The increase in the amount a homeowner pays on the bonds and other taxes is based on those increased valuations."

Fritz said depending on where you live, there could be several different authorities taxing your property. For example, appearing on every homeowner's statement this year will be a charge for flood control, the voter-approved library bond, the voter-approved Arizona Western College bond as well as its primary tax levy and a county tax.

They will also be taxed by a high school district and elementary district, plus any other special districts residents might live in.

"It's all listed line by line on a homeowner's tax statement," Fritz said. "Taxpayers can see how much their bills went up by looking at the 'Difference' column of the statement."

What homeowners can't tell from their statement, Fritz said, is how much property valuations increased over the previous year.

Assessor Joe Wehrle explained that it is still possible to pay higher taxes if the homeowner's property valuation goes up more than the percentage decline in the tax rate.

Wehrle said the property valuations homeowners are seeing on their 2007 property tax statement are based on the market value of homes sold between January 2004 and June 2005, as a real estate boom swept across the country.

He went on to say Arizona uses two different valuation formulas to calculate the amount that can be collected on property taxes: a full cash value assessment and a limited property value assessment.

In general, the full cash value - or secondary property tax - is the basis for bonds, overrides and special districts. The limited property value - or primary property tax - is the basis for maintenance and operation budgets of schools and municipalities.

In explaining the difference between the two formulas, Wehrle said the primary property tax is a statutorily calculated value, while the secondary property tax is based on the sale price of similar properties in the area and set by the assessor's office.

During that 2004 to 2005 period - on which the 2007 tax statement is based - the full cash value of homes in Yuma went up 32 percent and the limited property value rose 19 percent.

"That was an expensive time in Yuma," Wehrle said. "A lot of new homes got built then and there was a large change in the market."

He explained that, by law, the amount of taxes - or what is called a levy - that the county can collect from property taxes each year can be increased by only 2 percent, plus the taxes derived from any new construction.

In 2006 - when taxes were based on the market value of homes sold between 2003 and 2004 — the county raised $17.5 million in property taxes. This year, they raised $18.9 million, which is a 7.6 percent increase.

The limited property value assessment for Yuma in 2006 was $820.7 million. It was $937.8 million in 2007 - a 14.2 percent increase.

As a result of the 14.2 percent limited property tax increasing more than the 7.6 percent levy on property tax collections during that taxing year, a downward tax rate adjustment was caused in many of the county's taxing jurisdictions.

What this means, according to Wehrle, is that any homeowners whose property valuations went up more than 6.1 percent this year will see an increase in their taxes, despite tax rates dropping again in some of the county's taxing authorities.

You can find out how much your valuation went up on your 2007 notice of value, which is sent out each year by the assessor's office.

Wehrle said this is actually the third consecutive year the county's portion of the tax rate has gone down.

The tax rate on the 2006 property tax statement was $2.14 per $100 of assessed value, compared to $2.02 per $100 of assessed value for all property on the 2007 property tax statement.

The $2.02 per $100 of assessed value for all property on the 2007 property tax statement is actually the 6.1 percent being subtracted from the 2006 property tax statement, which was $2.14 per $100 of assessed value.

"Our tax rates have been declining every year as property values have been increasing," Wehrle said.

Comparatively, in 2005 the tax rate was $2.22 per $100 of assessed value, which decreased to the $2.14 per $100 of assessed value of 2006.

Fritz said the assessor's office will be sending out the 2008 notice of values for all properties very soon. There, homeowners can find out the valuation of their homes for the upcoming tax year.

"Bottom line, it affects your taxes so you need to be on the lookout for it," Fritz said. "And if you disagree with the value, you need to file a protest with the assessor's office."