Property taxes 'unlikely to fall'

10.15.08
By Sarah Beldo

As if homeowners didn't already have enough to worry about. First, headlines have been revealing for the past several months that property values in many areas across the U.S. are in decline - with some places in complete freefall.

Now, a report on CNN Money suggests that your home's lower value may not have any bearing on the amount of property tax you will be charged.

Americans have been paying higher taxes on their homes for the past several years. According to figures from the National Taxpayers Union, this year's taxes will be 25 percent higher than those charged in 2004 and 50 percent higher than 1999 levels.

This is because home prices were previously on the rise. However, now that prices are going in the opposite direction, homeowners may be looking for relief - but not finding it.

Bruce Hahn of the American Homeowners Foundation told the news provider that even if someone gets their home reassessed, the assessor will use values that were determined at least a year ago.

Furthermore, in some areas, tax departments may have budget pressures that force them to raise rates, which effectively negates any potential savings from a reassessment.

"State and local governments depend very heavily on real estate taxes and they are reeling from a loss of revenues from sales taxes and other sources," Hahn explained.

His warning comes as the IAS360 House Price Index revealed on Tuesday that house prices nationwide decreased by an average of 0.2 percent in August, compared with the previous month. Prices were 11.6 percent lower than those in August 2007.

So, in the end, it seems that the only certainties for the near future may be death, taxes and falling house prices.

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Property taxes are likely to remain high