Carolinas Real Estate Talk: Property Revaluation and Property Taxes in Union County NC
You've received notice from Union County that your property value has increased by 20% for the 2008 tax year. Does it mean that that your property taxes will be higher this fall when you get your 2008 tax bill? Not necessarily.
How are property taxes calculated in North Carolina? A homeowner's property tax is calculated by multiplying the assessed value by the county and town tax rates. Local governments adopt budgets and set tax rates to pay for the budget every summer in June. When assessed values in a jurisdiction go up, local governments will typically lower the tax rates. Homeowners who live in neighborhoods with high appreciation will typically see higher tax bills. Homeowners who just bought new homes in the past year are probably already assessed at current market rate. These homeowners may not see their taxes change much or with a tax rate reduction may actually pay fewer taxes.
What happened to Union County tax rates during the budget process in June? The county and the towns could have adopted revenue-neutral tax rates during the budgeting process. Revenue-neutral rates would have dropped the tax rates enough so that the various local governments would not have collected more funds from property owners than the year before. What did they do? Most of them reduced the rates somewhat but none of them adopted a revenue-neutral rate or budget. So most property owners in Union County will pay higher property taxes in 2008.
See my next post for an estimate of property taxes on a $200,000 home in Union County.