Are property tax increases a good sign for the market?

Asked by Lee Sherman, Pensacola, FL Thu Sep 19, 2013

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Diane Harmon, Agent, Pensacola, FL
Thu Sep 19, 2013
Here is some information that might be helpful?
Myth #1: Assessors determine property taxes

False. Assessors determine the market value of a property. This assessment of market value is multiplied by the tax rate to come up with the actual amount of property tax on a property tax bill. Property tax rates are usually set by the local government, such as city legislatures, county legislatures, school boards, etc.

Myth #2: Taxes are high because of assessments

This can be true, but assessments are only part of the picture. A high assessment can contribute to high property taxes, but the tax rate is what really determines the amount of tax on your property tax bill. You can have a low assessment, but if that low assessment is subject to a high tax rate, you’re going to have a high property tax bill.

However, short of complaining to your local government about tax rates or voting no on rate increases, your assessment is usually the only part of your property tax bill that you have the power to do anything about. Since assessments can be somewhat subjective, most localities have procedures in place that allow you to appeal your assessment if you feel it’s too high or not at market value. Check with your local assessor’s office on how to file an appeal.

Myth #3: States collect too much money through property taxes, or property taxes are high because of state budget shortfalls

Property taxes are the number one source of revenue for local governments and school districts, not the state. According to the Tax Policy Center, states get less than 2% of their tax revenue from property taxes. And many states receive zero tax revenue from property taxes, allowing localities and school districts to have all of the revenue instead.

However, states that lack a sales tax or an income tax (or both) typically rely more on property taxes. Vermont, New Hampshire, Wyoming, Washington, Montana, Michigan, and Arkansas get slightly more than 8% of their tax revenue from property taxes. Some states, including Michigan, Vermont, and New Hampshire have enacted special state property tax levies to increase funding for public schools.
2 votes
J, Agent, Greensboro, NC
Thu Sep 19, 2013
A few years ago I assisted a few homeowners in an effort to appeal/dispute tax hikes on their properties due to county/city assessed values. Many of these properties were $20k-$50k over actual market values at that point in time. Diane, you've offered an excellent response to Lee's question. Property tax value has very little to do with actual market value of any property.
0 votes
Yanoska Diaz, Agent, Miami, FL
Thu Sep 19, 2013
Certainly, tax assessments are completed every year based on the values concluded by the County's property appraiser which are based on real estate sales.
0 votes
Lee Sherman, , Pensacola, FL
Thu Sep 19, 2013
I am unable to answer my own question but insists that I do in order to post this listing.
0 votes
The Harmon Murphy Group with Keller Williams Realty Gulf Coast. Call today.
Flag Fri Sep 20, 2013
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