King County property values are rising at ‘unprecedented’ rates; probable tax increases
The region’s booming real estate market has led to home value increases that will drive up next year’s property tax bills, according to the King County Assessor’s Office.
Home values are up throughout the county, and especially in Eastside areas such as Redmond (43%), Woodinville (44%) and Kirkland (44.5%).
The Sammamish Plateau topped the list with a 52% increase from the previous year, according to the assessor’s office. In Seattle, values at Rainier Beach rose 19%.
The higher increases are significant even for the overheated Seattle-area real estate market. Last year, values increased by 18-22% in some areas.
This year’s property tax bills are based on last year’s assessed values, but these new values will determine next year’s taxes. The Assessor’s Office will be mailing Notices of Assessment starting this week.
Since the start of the pandemic, local buyers have faced fierce competition, spurred by a combination of few homes for sale, a flood of buyers looking to take advantage of low mortgage interest rates and a steady influx of well-paid workers. with stock options. This drove up home prices across the region, especially outside of Seattle. The median price for a single-family home in King County hit nearly $1 million last month.
With mortgage rates rising, the market has recently started to show signs of slowing down. But the county’s assessments are based on estimated values as of January 1.
While it may seem unusual, rising property values don’t always have a huge effect on property tax bills.
It’s because of the way Washington calculates property taxes. The assessor’s office essentially determines the amount of property tax revenue that is owed to the various public bodies. Then, to reach this total amount, the appraiser determines the amount to charge each owner, based on the value of the property. The amount generated by the county cannot increase by more than 1% each year, with one small exception: voter-approved tax increases, such as school levies.
Thus, when home values increase uniformly throughout the county, tax increases are primarily affected by these levies, not by rising values. But when values rise faster in some areas than others, homeowners may see their bills soar due to those rising values.
That’s happening this year, and it will increase some homeowners’ taxes next year, according to the Assessor’s Office. The county won’t issue tax bills until next year, but the hottest local housing markets are expected to see “a double-digit increase,” Wilson said.
“It’s not a direct ‘my value has gone up 30%, so my taxes are going to go up 30%,’ but when you get to that magnitude, it has some impact,” he said. “We don’t want to mislead the public.
The county’s high ratings in areas northeast of Seattle roughly echo home sales data from the Northwest Multiple Listing Service, which the Seattle Times maps monthly.
Rising property values have created a boon for landlords looking to sell, but can put a strain on low-income homeowners who bought long before the rise in values or renters whose landlords cite property taxes as justification for rent increases.
The county offers property tax cuts for some seniors and people with disabilities, but that program has been overwhelmed with applications, leaving people to wait months for a decision.
Homeowners can appeal their assessment within 60 days of the date shown on the card they receive in the mail. Find more information about exemptions and appeals at kingcounty.gov/depts/assessor.