If you own a home in Pierce County, you’re about to find out what a hot housing market looks like.
On Friday, the Assessor-Treasurer’s Office mailed its annual valuation notices: those little green cards that tell you how much your property is worth, according to official assessments.
For most of the county’s roughly 325,000 properties, the answer is more. Collectively, county-wide property values rose by 12.25 percent in 2016, said assessor-treasurer Mike Lonergan.
The biggest bumps showed up in Sumner (16.8 percent), Ruston (16.5 percent) and Fife (16.3 percent). The Key Peninsula leads the county’s unincorporated areas, with average value increases of 14.7 percent.
The numbers feed a misconception that property taxes will rise at the same rate, but that’s a basic and common mistake.
“If everybody’s value is going up approximately the same, then your share of taxes remains the same,” Lonergan said.
How can that be? Because property taxes, collected by cities, schools, fire districts and other taxing entities, are limited by law to annual increases of 1 percent. In that sense, it doesn’t matter whether property values double or triple: local taxing districts can collect only 1 percent more than the previous year.
“It is the aggregate, the overall amount,” Lonergan said. “That’s not going to affect the individual.”
Naturally, in particularly hot areas where sales are booming, individual property owners can see increases, Lonergan said.
Property values are calculated based on comparable sales in the same area. That’s another booming number in Pierce County. Sales rose from 11,600 in 2015 to 14,600 — the biggest jump Lonergan has seen since he took office in 2013. He expects to see another bump from next year’s numbers.
If property owners disagree with their new assessment — whether they think it’s too high or too low — they can appeal it to the county’s Board of Equalization, which referees such disputes.
Values and taxes also can drop in cases where a property has deteriorated, or trees have grown to obscure a once-valuable view. Generally, rising assessed values don’t drive tax increases; that force comes from voters who approve levies for schools and fire districts, among other things.
Lonergan and his staff, along with county assessors throughout the state, are coping with a separate unknown element: the state Legislature’s overhaul of the property tax system to fund basic education. It would increase state property taxes while lowering or capping local property taxes, depending on the region.
“That’s the wild card,” he said. “That’s the unknown right now, so we won’t really know about taxes until various votes in taxing districts are taken.”