Have you ever wondered how the county comes up with the assessed value of your home and your property taxes? Or why your taxes may increase when your assessed value decreases?
While the Assessor sets the value for taxable property, the amount of property tax you pay depends on the cost of state and local government. About half of your property tax is determined by the levies you and your neighbors have approved for services such as schools, parks, water districts, emergency medical service, and fire protection, among others. In King County, only 17 cents of every property tax dollar supports the King County General Fund. The other 83 cents is divided between the State, Cities and other local jurisdictions.
Residential property is assessed each year at its full market value, which is defined as the amount a buyer, willing but not obligated to buy, would pay to a seller willing but not obligated to sell. The assessed value of your property is then multiplied by the tax rate necessary in your levy area to produce your fair share of the total levied tax by these jurisdictions. Then the treasurer calculates the taxes due and sends out the tax notices using the taxing district information
Mobile homes and floating homes are valued differently than traditional residences.
So how does the county determine the assessed value or fair market value? For residential parcels, fair market value is determined by analyzing recent sales of comparable properties in the same area.
In valuing residential real estate, the assessor will look at both land and improvements (buildings, bulkheads, etc.). They begin by establishing land value, which state law requires to be valued as if it was vacant. This value is determined by analyzing sales of comparable bare land. If there have been no recent sales, we use other recognized appraisal methods (more on that in another blog).
The next step is to study sales and market trends of improved (developed or built-on) properties in a selected area. This sales analysis is used to determine total market value based on size, year built, quality of construction and other characteristics. From this total value, the assessor subtracts the amount determined for the land. The balance is allocated to improvements.
In addition to this Market Approach, residential property can also be valued using the Cost Approach, which sets the value based on what it would cost to reproduce or replace the property, minus its depreciated value.
In addition to statistical analysis to determine value, all properties are physically inspected once in every six year cycle.
Whenever your property is revalued, you should receive an “Official Property Value Notice” showing your old and new total values with separate values shown for land and improvements.
As we said before, the amount of property tax you pay depends on the cost of state and local government, including the operating costs of schools, roads, parks, libraries, hospitals, city and county government, and your local taxing districts such as ports, fire districts, utility and sewer districts. A large part of each property tax dollar goes to pay off construction bonds for school buildings and other public projects.
Depending on where you live, the specific taxes levied in your area, and local real estate values, it’s possible that your taxes can increase, even if the appraised value of your home decreases. That’s because about half of your property tax is determined by the levies that you and your neighbors approve for such services as schools, parks, water districts, emergency medical service and fire/rescue, among others. If these levies stay the same or increase from the year before, your property taxes may increase. Similarly, if other valuations decrease more than yours, your taxes may also increase.
The state legislature sets statutory levy limits. In addition, voters approve excess levies to fund local projects or services, such as additional school levies, fire protection, sewage and wastewater treatment.
To determine your tax rate, officials divide the total amount of money needed for your district by the total value of property in your district. Then, they add up all the levy rates of the various taxing districts in which your property is located. The assessed value of your property, multiplied by the combined rate, produces a tax amount which is your fair share of the total property tax levy in your area. The County Treasurer issues tax statements and taxes are paid to the County Treasury Operations.
So now you know!