Oct 25, 2007 11:31 pm US/Central
Good Question: Will Taxes Fall With Home Values?
(WCCO)
What goes up must
come down, unless you're talking about taxes. In the past several years, real
estate prices have skyrocketed, along with our property taxes. However,
now that home values are falling, tax rates don't seem to be going in the same
direction.
"Funny how
that works," said one Minneapolis
homeowner.
"Right now we're
going through a change," said Chris Galler, who works for the Minnesota
Association of Realtors. "I wouldn't think that they'll creep down
anything substantially."
That's because
while it's tougher to sell a house these days, our homes have not lost as much
value as we may think. Nationally, the median home price has fallen 4.2 percent
in the past year, but locally it's been less than a 2 percent drop.
"So the
assessors may still be within the window of having it properly assessed,"
said Galler.
Another issue is
that the taxes we pay are tied to how much our governments spend.
"As the value
of the property went up, the revenues to the cities and counties and schools
went up, and they spent to that level," said Galler. "The increases
in spending now have to be readjusted if there's going to be tax declines."
"Knowing how
governments work I would be surprised if we got a refund," said one man
near Lake Harriet
in Minneapolis.
"If indeed
citizens want to change taxes they need to go to their local hearings and say,
'I want less services, please cut that, please cut this,'" said Galler.
Some homeowners
will see modest declines in their property taxes depending on where they live.
However, the experts tell us that any declines in tax income from homeowners
will likely be made up by other real estate such as businesses.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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