Property tax decreases predicted in Grand ForksPreliminary calculations from the Grand Forks County auditor’s office are forecasting a decrease in property taxes this year for Grand Forks city residents.
By: Brandi Jewett, Grand Forks Herald
Preliminary calculations from the Grand Forks County auditor’s office are forecasting a decrease in property taxes this year for Grand Forks city residents.
If a property’s value stays the same, its owner can expect to see about a 20 percent cut in taxes from last year, according to County Auditor Debbie Nelson.
That calculation includes taxes from the county, city, park district and school district. For the owner of a $100,000 home, that difference is about $380.
Increases in property values would slim that margin. The increases vary by property, but the city finance department estimated the average increase to be about 3 percent earlier this year.
“Have property values increased over last year? Absolutely,” City Assessor John Herz said. “Will they continue to increase? That is the question.”
‘Apples to apples’
Predicting property values can be tricky process for assessors.
The ups and downs of property values is based on the history of sales in the city. When a home is sold, its sales price is compared to the assessed value, which could result in a valuation shift if the sales price is high or low enough.
Herz said his office is in the preliminary phase of determining what will likely happen to property values in the city in the future.
One thing he does know is that sales have increased.
In the first nine months of 2012, the number of useable sales was 488. During the same time period this year, the number of useable sales increased to 528.
Useable sales refer to sales the assessor’s office can use in property value calculations. An example of unusable sales is the sale of property that was vacant lot one year and has a house on it the next.
“We need to compare apples to apples,” Herz said of useable sales.
The median sale price of Grand Forks homes also increased during this time, jumping from $151,700 to $170,000.
According to Herz, the increase doesn’t necessarily mean valuations are going up by that much for every property. Part of the increase could be caused by inflation and the possibility that more homes of higher value sold this year than the year before.
For owners that do see a decrease in taxes despite rising property values, that reduction is a product of a tax credit and school tax levy buydown passed by the state Legislature this year.
The tax credit covers 12 percent of an owner’s property tax bill. The state also bought down 50 mills from school districts. A mill is one-tenth of a cent and is used to calculate property taxes.
Grand Forks Public Schools passed on 34 mills of the buydown to taxpayers, keeping the remaining 16 mills to cover its rising costs. If the full 50-mill savings would have been passed on, the owner of the $100,000 property would’ve seen a $418 decrease in property taxes for 2013.
Call Jewett at (701) 780-1108, (800) 477-6572 ext. 1108 or send email to firstname.lastname@example.org.