Home Values Plunge, Taxes May Not

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Rim Country home values fell in some neighborhoods as much as 44 percent in the past year, according to information released this week from the county assessor’s office, but that doesn’t necessarily mean taxes will fall.

Values in some neighborhoods, including Payson Pines and Deer Creek Village stayed the same, while places like Wildflower saw a 44 percent drop. Most neighborhoods saw declines in the 20 percent range.

In Pine and Strawberry, homes dropped an average of 17 percent with the highest drop of 24 percent in the Cool Pines area.

Chief Appraiser Larry Huffer said this year’s low sales made calculating values difficult because the numbers are derived from home sales in the past 18 months.

“I wasn’t surprised, just because I did know that the market was certainly turned downward,” said Huffer.

Taxes based on the values sent out earlier this month will be due in the fall of 2011. This fall’s taxes are based on the values sent last March. Those values also fell in northern Gila County, but not as drastically.

Southern Gila County’s values fell this year, too, although they stayed stagnant last year.

Huffer attributed northern Gila County’s greater decline to the more robust supply of upscale homes, which took a hit in the market.

In Chaparral Pines, home prices declined an average of 21 percent, and in The Rim Club, they fell 19 percent.

While the home’s market value, also called full cash value, can decline, another value called limited cash value can still increase because of the statutory formula used. Different districts tax on different values, although some entities like the town of Payson, tax both values.

Most special taxing districts, like fire and water, tax on the market value, also called the secondary value.

Towns and the county generally tax the primary value unless they also levy a secondary tax like Payson. Schools also mostly tax the primary value except for budget overrides and bonds, which are levied on the secondary value.

The primary value, also called limited cash value, is based on a statutory formula that Huffer said is used to insulate people from dramatic market fluctuations.

When the real estate market booms, limited cash values are slower to escalate.

When market values drop during busts, however, the limited cash values tend to keep rising, although they can never exceed the market value.

“Unfortunately, that’s not really appealable,” said Huffer about the limited cash value, because it’s formula-based.

Huffer still doesn’t know valuations for larger parcels like the mines and telecommunications parcels, because a state agency values them. The county’s total assessed valuation is still unknown.

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