property tax (houses, school, taxi)

[Union Proud]

OK now since home values are decreasing should our property tax do the same? My property value went down about 30k in about a year due to new builders drooping their prices substantially.Existing home owners selling their property below value to get out of their homes.So why our property isn't being reassess to lower taxes?

[oakparkdude]

That's not quite how it works. The amount of property tax you pay is determined by the assessed value of your house and the overall tax levy. The tax levy is thet amount of total property tax raised by the taxing entity (city, school board, park district, etc). The assessed value of your property is used to figure out the what proportion of the overall levy that you have to pay.

For example, say the levy is 1 million dollars in 2007, and there are a total of 1000 houses each assessed at 100,000 dollars. Since each property has the same value, each property owner owes 1/1000 of the total levy, or $1000. In 2008, the market crashes and everyone's home drops in value to 80,000. If the tax levy remains at 1 million dollars, each property owner still owes 1/1000 of the levy so your tax due is still $1000. Since your assessed value dropped, you technically are paying a higher rate, but your actual bill is the same. Now, if your home drops in value but other homes rise in value, then you'll be paying less and others will be paying more. If 1000 more homes identical in value to yours are built and the levy remains the same, your tax bill will drop in half. Of course its much more complicated because the tax levy never stays the same (it always goes up!), there are multiple taxing bodies with multiple, non-identical boundries, properties are added and subtracted from the tax rolls, etc.