James City County’s overall real estate tax assessments dropped over three percent this year, and residential assessments dropped almost six percent, according to tax data released Tuesday. The drop was on par with what the county had anticipated.
The county has a biennial (two-year) real estate tax assessment cycle; the last cycle started in 2010. Before 2010, the county had a one-year cycle. The new assessments were just completed and showed a decline in overall real estate assessments of $10.9 billion, which is 3.67 percent lower than 2010. Individual residential home values dropped by 5.64 percent. Staff had originally projected a six percent drop in residential assessments.
These reassessments reduce projected county revenues by about $3.9 million for upcoming fiscal year 2013, but this is partially offset by new taxable property coming on the books, according to the county’s Financial Manager John McDonald. He noted that these numbers are only tentative projections and could change as adjustments are made during the appeals process.
The county reports that homes valued at less than $200,000 and more than $700,000 saw the least amount of valuation reduction; homes valued between $300,000 and $500,000 saw reductions that were higher than average.
No county properties saw an increase in value, neither residential nor commercial.
The county evaluated 31,000 properties, including 27,600 residential ones. About 22,000 homeowners will receive assessment reduction notices soon that will be valid through 2014.
During a Board of Supervisors discussion on the upcoming budget in January, county staff cautioned the Board to expect a reduction in residential real estate property values of an average of six percent, close to what the current numbers indicate. The Board will need to decide how to make up for two years of lower property tax revenues.
The Board sets the real estate tax rate; at a meeting earlier this year staff told the Board that it could choose to make up for projected revenue shortfalls in the upcoming biennial budget by increasing this rate (see a previous story here).
The current tax rate is 77 cents for every $100 in value. Should the rate stay the same, this would mean an average savings of about $115 for a home valued at $250,000. This is only based on the average, though – homeowners could see more or less savings, depending on individual home assessments.
The Board is set to adopt the tax rate when it adopts the budget, which will be on May 8. The County Administrator’s proposed budget will be released on April 13, with a public hearing to follow.