Property tax increase will be modest in 2021, assessor says, though values are soaring

Gig Harbor and Key Peninsula homeowners will see only a modest increase in property taxes this year, said Pierce County Assessor Mike Lonergan as his office began to send out assessment notices last week.

That’s because taxpayers did a lot of the heavy lifting last year, Longergan told The Gateway.

Last year saw hefty tax increases for most property owners, due to the Legislature’s increase in the maximum local school district enrichment levy, from $1.50 to $2.50 per $1,000 of property value.

“That’s all pretty much behind us this year,” said Lonergan. “Even though property values continue to increase, especially in desirable places like Gig Harbor, rates have pretty much stabilized.”

For most homeowners, property taxes will increase somewhere between 3.5 and 5 percent in 2021, Lonergan said, even though home values have increased 8 to 10 percent. The actual rate will depend on the overlap of taxing districts — schools, parks, fire and others — for each neighborhood.

Average Residential Values and Taxes for 2020 and 2021

*unincorporated areas

Paradoxically, the soaring property values in Gig Harbor and the Key Peninsula are helping to keep tax rates in those areas low, Lonergan said, because taxing districts can bring in more revenue without raising rates.

“The city of Gig Harbor, for example, is pretty frugal.” Lonergan said. “They have the only single-digit tax rate in the county — 9.7 percent — but they still collect plenty of money, because of all those expensive waterfront properties.”

The average home in the Peninsula School District is now worth close to $600,000, and real-estate listings are bulging with waterfront homes listed at a million-point-something. Even on the mostly rural Key Peninsula, the average home is now worth almost $432,000.

“We’re still seeing values going up steadily,” Lonergan said. “People are starting to locate farther from central cities. Now we are learning that we can work from home, and that makes it a lot more attractive. You can live in a nice area like Gig Harbor and not even have to commute across the bridge.”

The annual tax is determined by multiplying property value (in thousands of dollars) by the combined rate of all taxing districts where the property is located.

In the Peninsula School District, the average home increased in value from $551,158 to $593,169, leading to a tax increase of about $239. The average homeowner will pay about $6.396 in property tax to the school district in 2021.

The tax bills going out in February reflect valuations done in January 2020, so they don’t reflect any influence from the COVID-19 pandemic, Lonergan said. Not everyone will get a bill. Homeowners who pay their taxes through a mortgage escrow account will have statements sent to their bank.

Countywide, property taxes billed this year total $1.67 billion, a 4.8% increase over 2020, according to the assessor’s office. In addition to schools, property taxes pay for city and county government, fire districts, emergency medical service, parks, libraries, roads, Port of Tacoma, Sound Transit and flood control. Fees for conservation, noxious weed control and surface water are also included on the property tax statement.

The state and local portions for schools add up to 59.6% of all property taxes in Pierce County. The cities and county, including the road district, add up to 21% and fire districts equal 11%. Together, these make up over 90% of Pierce County’s property tax, according to the assessor’s office.

The Peninsula Metropolitan Park District will collect about $7.3 million in property taxes, the Key Peninsula Metropolitan Park District about $1.4 million.

Property owners may view their tax statement online at the Assessor-Treasurer’s website, piercecountywa.gov/atr, by entering either their tax parcel number or their street address. Payment is due in two halves, by April 30 and November 1, 2021.

This story was originally published February 17, 2021 at 12:53 PM.