The region’s hot real estate market has led to ‘unprecedented’ Real estate value increases that will boost property tax bills next year, according to the King County Assessor’s Office.
Home prices have risen across the county, particularly in Eastside areas like Redmond (43%), Woodinville (44%) and Kirkland (44.5%).
The Sammamish Plateau topped the list with a 52% year-over-year increase, according to the Assessor’s Office. In Seattle, Rainier Beach values are up 19%.
The highest increases are significant, even for the overheated Seattle-area housing market. In the past year, the values have increased by 18% to 22% in some cases.
This year’s wealth tax bills are based on last year’s estimates, but these new values will drive next year’s taxes. Starting this week, the appraisal office will be sending out appraisal notices.
Since the pandemic began, local homebuyers have faced stiff competition spurred by a combination of few homes for sale, a surge of buyers looking to take advantage of low mortgage rates, and a continued influx of high-paid workers with stock options. That has pushed up real estate prices across the region, especially outside of Seattle. The median price for a single family home in King County reached nearly $1 million last month.
The market has recently shown signs of cooling as mortgage rates have risen. However, the county’s estimates are based on estimates as of Jan. 1
While it may seem unusual, rising property values don’t always have a huge impact on property tax bills.
That’s because of the way Washington calculates property taxes. The appraisal office essentially determines how high the income from the property tax is due to the various public authorities. To arrive at that total, the appraiser then determines how much each property owner will be charged based on the value of the property. The amount the district generates is not allowed to increase by more than 1% each year, with one small exception: voter-approved tax increases such as school fees.
So if real estate values are rising evenly across the country, tax increases will be driven primarily by those levies and not by rising values. But when values are rising faster in some areas than others, property owners may see spikes in their bills due to these rising values.
That’s happening this year, and it will raise taxes for some homeowners next year, the assessor’s office said. The county won’t deliver the tax returns until next year, but the hottest local housing markets are likely to see “a double-digit surge,” Wilson said.
“It’s not a direct ‘My worth is up 30%, so my taxes will go up 30%,’ but when you get to that magnitude it has some impact,” he said. “We don’t want to fool the public”
The county’s high ratings in the areas northeast of Seattle roughly reflect home sales data from the Northwest Multiple Listing Service, which the Seattle Times charts each month.
Rising home values have brought good fortune to owners looking to sell, but may weigh on lower-income homeowners who bought well before rising values, or tenants whose landlords cite property taxes as justification for rent increases.
The county offers property tax breaks to certain seniors and people with disabilities, but that program has been inundated with applications, forcing people to wait months for a decision.
Property owners can dispute their rating within 60 days of the date on the card they receive in the mail. See kingcounty.gov/depts/assessor for more information on exceptions and appeals.