Wednesday, June 11, 2003

Q. Why are taxes going up so much?

Our home gets reassessed almost every year and we’re worried that we won’t be able to afford to live here after retirement. I thought we passed some new law a few years ago to limit tax increases.

First, you have to understand that the tax rate hasn’t gone up. It is limited by law. It isn’t the tax rate that’s gone up, it’s the value of our real estate. Our current rate is something like $12.00 for each thousand dollars of value. So, a home valued at $300,000 pays about $3600.00 per year in taxes. As an example, if you purchased your home in the 80’s for $50,000 and it’s worth $350,000 today, you can see why you are paying higher taxes.

It’s important to understand that real estate values have gone up all around the country and especially in the popular Puget Sound region. Vashon Island was sort of “discovered” in the early 1990’s and it’s been a “hot” market ever since. More folks want to live in our wonderful community than we have homes to sell them. This drives up the prices and that’s what the County uses to set their new assessments.

With rare exception, most of the tax statements I’ve looked at for clients reflect the current market value. Most people can’t really make a case for a lower assessment. About all you can do is investigate every tax savings mechanism available and see if you qualify. There are great tax breaks for low-income seniors for instance, and you can get tax benefits from setting aside wildlife habitat and open space.