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Rising property tax assessments not halted by falling home prices

February 09, 2008|By ARNOLD S. PLATOU

WASHINGTON COUNTY -- You know housing prices are down.

So how could the average tax assessment value of thousands of Washington County properties jump a whopping 40 percent this year?

Simply put: Homes still cost more than they did in 2004, when these properties were last assessed, said W. Timothy O'Rourke, supervisor of assessments here.

"Everybody says the market's been in decline, but the last time we took a picture of this thing was in 2004," O'Rourke said.

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From 2004 into 2006, housing prices soared, he said. "You had tremendous appreciation until halfway into 2006. Then they leveled off and, in some instances, they declined."

"But, certainly, I could get more for my house now than I could in 2004," he said.

The assessments -- together with the tax rates local and state governments will set before July -- will determine how much property tax folks will owe.

For many homeowners, the good news is, they will still qualify for assessment limits. Those will lop part of the increase off of tax bills.

The process


Throughout Maryland, a total of 728,185 property owners were mailed new assessment notices in late December. This represents a third of all the properties in the state.

Another third will be sent notices next December, another in December 2009, and so it continues.

O'Rourke said that in the fall of 2006, his crew of seven assessors -- two men and five women -- began a yearlong process of visiting the roughly 18,000 residential and 1,500 commercial properties whose owners have just received the latest reassessments.

"Each assessor would have roughly 3,000 properties to look at. ... They go out to look at your property and the properties on your street," he said. "They'd have your worksheet in hand, showing the size of your property, the age of your house, and a recent sales history so we'd know if the property was sold in the last few years.

"Then, we'd also get a copy of any building or electrical permits that were taken out. So when the assessor pulled up to your front door, he'd already know a lot about the property. ... They might look at a hundred properties each day.

"Say, they looked at your house and saw now you have enclosed a patio. So you'd enter that change. Maybe he'd go to the next property and say it had been in average condition and now it's really deteriorating. Or, maybe it's going the reverse. ... Looks like new owners have gone in and fixed it up."

As the months of visits go on, the information the assessors collect is recorded. But no values would have been determined until about October when the assessors begin comparing each house to others that have been sold in their general area and getting the notices ready for printing, O'Rourke said.

'This year wasn't typical'


Normally, for the notices just sent for the 2008 tax year, the assessors would have compared each property to those that have been sold the past two years.

But the downturn in the real estate market particularly during 2007, forced a change, O'Rourke said.

"Typically -- but this year wasn't typical -- you'd look at all of '06 and most of '07," he said.

"We've been in sort of a declining market so, this year, we really put more emphasis on the '07 sales because the market seemed like it was still going down," he said.

Consequently, the assessment increase wasn't as high on average as it could have been if the real estate market was still roaring ahead.

Indeed, this year's 40.2 average percentage increase here pales in comparison to the averages the past two years, which seem to reflect more of the boom in the market.

The value of properties reassessed in the county for the 2006 tax year rose an average of 58.6 percent, according to the Maryland State Department of Assessments and Taxation. Those reassessed for 2007 soared an average of 64.7 percent.

"I've never seen properties appreciate as rapidly as they did," said O'Rourke, who has worked in the assessment office for 30 years.

By comparison, the average assessment increase statewide was 60.2 percent in 2006. It was 56.1 percent in 2007 and 33.2 percent this year, the agency said.

Homeowner angry


Nonetheless, of course, no one likes paying taxes. Certainly not Richard Montgomery.

Thirty-six years ago, Montgomery and his wife, Darlene, and their three sons were living in their first house, a small brick rancher in Williamsport.

Looking for a house to buy north of Hagerstown one day, he turned off Paradise Church Road onto Woodhaven Drive and then onto Long Ridge Drive, and spotted a house that contractor Don Keener was building. "I said, 'Huh, wonder if he's building it for anybody?'" recalled Montgomery, who is now 69.

The house was for sale, and Montgomery bought it for $31,000 and its four-tenths of an acre lot for $4,500.

"And now," Montgomery said, talking about the assessment notice he received last year, "they're saying the lot is worth $113,710! That's some expensive dirt!"

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