Monday, October 26, 2009

Home Value Down ... Property Taxes Up

Earlier this year I was all gitty because my county sent a letter telling me that the taxed value of my home had changed, it had decreased by a few thousand dollars. I purchased my home about 6 years ago in a somewhat mature neighborhood so we didn't see the cost run-ups that occurred in the last decade. Nonetheless we, like everyone else, felt some level of impact by the real estate burst so the letter wasn't totally unexpected. However, the letter the followed a few months later was a gitty thief.

Imagine my surprise when I received the property tax bill and it was a couple of hundred bucks more than it was last year. What? That's not how the relationship works. When values go down so do the associated taxes, and vice versa. What's up with this inverse relationship between home values and property taxes? Hmph. Luckily my friendships are such that we can talk about personal finances. I was one day away from harassing my county tax commissioner when my dear friends reminded me that our beloved state is NOT providing the homestead credit this year because, eh hem, they're in a fiscal fiasco. Oh, yeah, I forgot about that, rats.

Because my property taxes are escrowed my mortgage is sure to increase by roughly $20 each month to accommodate for next year's taxes (the mortgage company use last year's figures to determine the monthly amount for the upcoming year). Additionally, I'll have to come up with the shortfall by February since this is when the mortgage company reassesses my escrow account. I'm anticipating that letter so I'll begin planning for the extra expense. What have we learned here today ladies and gents ... the government giveths, and the government takeths away.

1 comment:

Matt Jabs said...

Yes they do! And mostly they taketh away.

You can dispute your property tax evaluation if you really want to get your hands dirty. Depending on what state/county you live in, these disputes usually take place only once/year in March.

Godspeed. At least you are aware of the change and have budgeted accordingly which puts you in as good a place as possible.