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Old 01-23-2014, 09:30 AM
 
Location: Madrona, Seattle, WA
279 posts, read 385,431 times
Reputation: 330

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I'm seeing such a huge difference in property tax rates. I realize that individual areas are different. But there doesn't seem to be a rhyme or reason on how it works? Is there a property valuation % cap? Like Prop. 13 for California.... Or can they just raise the rate at any point based on current market value.
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Old 01-23-2014, 10:20 AM
 
9,627 posts, read 23,815,567 times
Reputation: 5248
There is a rhyme or reason. Let me try to explain- I'm sure I'll make it clear as mud.
When you pay your property tax, the money gets divvied up between taxing districts. The state is a taxing district, the county is a taxing district, the city is a taxing district, etc. Each taxing district is limited to collecting not more than a 1% increase from the year before. That's total collected, not from each property, and there are exceptions. If they didn't collect the 1% increase a year ago, or for the last several years, they can "roll it over" and collect it all at once. They can ask the voters to increase it , and certain taxing districts can get an increase by a vote of elected officials rather than by the voters, like fire districts. As long as the total collected by the taxing district doesn't exceed a 1% increase, an individual's house taxes can go up more than that( meaning someone else's went down, or went up less.)
Let me give some examples. You own a house. The taxes are 3000 dollars per year. You live in an especially "hot" area where property values are skyrocketing. Maybe the people in another part of the city where they just put in a chemical waste dump, or housing for felons see their taxes drop, but you see a 3% increase. Then, on the ballot, the school district has a levy to build new schools, and are asking for another 1/2 percent.
Also, taxes are based on assessed valuation-what the county thinks is fair market value for your house. Sometimes it's accurate, but sometimes it's way off. It's supposed to be about 1.20 per thousand of assessed value, and sometimes the assessed value is completely off from actual market value. Besides what the real estate market is doing, what happens in your neighborhood affects the valuations. Another example: You live in a house with small 50's houses. Neighbors start selling, and the houses are replaced with mansion like houses. Even though you live in a little 50's house, the "value" of your house has increased because of the presence of the new neighborhood mansions- you could sell your house for a lot to someone who would tear it down and build one of these monstrosities. Just like the other example I gave- if in your neighborhood they build housing for sexual predators or heroin addicts or put in a chemical waste dump, that will lower the property values, and they're going to get the money somehow, so your neighborhood will see the increases.
Does this make any sense?
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Old 01-23-2014, 09:19 PM
 
Location: Madrona, Seattle, WA
279 posts, read 385,431 times
Reputation: 330
Quote:
Originally Posted by Ira500 View Post
There is a rhyme or reason. Let me try to explain- I'm sure I'll make it clear as mud.
When you pay your property tax, the money gets divvied up between taxing districts. The state is a taxing district, the county is a taxing district, the city is a taxing district, etc. Each taxing district is limited to collecting not more than a 1% increase from the year before. That's total collected, not from each property, and there are exceptions. If they didn't collect the 1% increase a year ago, or for the last several years, they can "roll it over" and collect it all at once. They can ask the voters to increase it , and certain taxing districts can get an increase by a vote of elected officials rather than by the voters, like fire districts. As long as the total collected by the taxing district doesn't exceed a 1% increase, an individual's house taxes can go up more than that( meaning someone else's went down, or went up less.)
Let me give some examples. You own a house. The taxes are 3000 dollars per year. You live in an especially "hot" area where property values are skyrocketing. Maybe the people in another part of the city where they just put in a chemical waste dump, or housing for felons see their taxes drop, but you see a 3% increase. Then, on the ballot, the school district has a levy to build new schools, and are asking for another 1/2 percent.
Also, taxes are based on assessed valuation-what the county thinks is fair market value for your house. Sometimes it's accurate, but sometimes it's way off. It's supposed to be about 1.20 per thousand of assessed value, and sometimes the assessed value is completely off from actual market value. Besides what the real estate market is doing, what happens in your neighborhood affects the valuations. Another example: You live in a house with small 50's houses. Neighbors start selling, and the houses are replaced with mansion like houses. Even though you live in a little 50's house, the "value" of your house has increased because of the presence of the new neighborhood mansions- you could sell your house for a lot to someone who would tear it down and build one of these monstrosities. Just like the other example I gave- if in your neighborhood they build housing for sexual predators or heroin addicts or put in a chemical waste dump, that will lower the property values, and they're going to get the money somehow, so your neighborhood will see the increases.
Does this make any sense?

Ummmm kinda! lol

Yes it makes sense.... I have done some research as well. I have found quite a bit of info.... it is still confusing tho
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Old 01-23-2014, 09:52 PM
 
5,076 posts, read 8,499,613 times
Reputation: 4632
The assessment values vary to a large degree. Within the first 12 months of buying our house I saw a number of homes sell for $10K0-$200K more but have a similar tax basis! We had the assessors out crawling around our property last month. One of them mentioned that they typically visit houses a year after it's sold.

Tax rates vary to a degree, but whether the basis gets updated regularly probably has more effect on amount paid. If you look at the assessment records, you'll see people regularly challenge the assessed value when it spikes.
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Old 01-24-2014, 03:54 AM
 
Location: rain city
2,958 posts, read 11,349,514 times
Reputation: 4909
Not much to explain.

They send you a bill.

You pay it, or they seize your property and sell it at auction.

End of story.
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Old 01-24-2014, 04:13 AM
 
392 posts, read 697,888 times
Reputation: 132
how much is average residential tax for Seattle downtown area 1.25% ?
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Old 01-24-2014, 08:15 AM
 
5,076 posts, read 8,499,613 times
Reputation: 4632
Quote:
Originally Posted by vrhunski View Post
how much is average residential tax for Seattle downtown area 1.25% ?
Looks to be 1.05%
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Old 01-24-2014, 03:15 PM
 
Location: Madrona, Seattle, WA
279 posts, read 385,431 times
Reputation: 330
Quote:
Originally Posted by azoria View Post
Not much to explain.

They send you a bill.

You pay it, or they seize your property and sell it at auction.

End of story.

Thanks!!! you totally helped out. awesome waste of a post

Cheers!
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Old 01-24-2014, 03:17 PM
 
Location: Madrona, Seattle, WA
279 posts, read 385,431 times
Reputation: 330
Here is some good info:
How The 1 Percent Property Tax Limit Works
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Old 01-27-2014, 12:30 AM
 
26,587 posts, read 52,247,863 times
Reputation: 20392
Quote:
Originally Posted by seattlefun View Post
I'm seeing such a huge difference in property tax rates. I realize that individual areas are different. But there doesn't seem to be a rhyme or reason on how it works? Is there a property valuation % cap? Like Prop. 13 for California.... Or can they just raise the rate at any point based on current market value.
For a time Washington State had it's own voter approved version of Prop 13 called I-747.

I did a lot of research before taking the plunge and buying a home... a big factor in making the decision was I-747.

My home was assessed for the price I paid during the time I-747 was law...

A judge threw out a key I-747 provision and my assessment increased 80% above my purchase price just 14 months prior...

It was a real shock and a very expensive lesson... a person can do all the research and planning and the unforeseen can still throw you a curve.

http://www.washingtonpolicy.org/publ...rty-tax-limits
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