King County property values ​​rise at ‘unprecedented’ rates; tax hikes likely

The region’s hot real estate market has led to “unprecedented” increases in home values ​​that will drive up next year’s property-tax bills, according to the King County Assessor’s Office.

Home values ​​are up all over the county, but particularly in Eastside areas such as Redmond (43%), Woodinville (44%) and Kirkland (44.5%). The Sammamish Plateau topped the list with a 52% increase from the previous year. That’s double the 26% increase in Federal Way.

In Seattle, values ​​are up 19% in Rainier Beach and 20% in Magnolia, according to the Assessor’s Office, which released a sample of data Thursday but is still finalizing values ​​in other areas.

The 30% to 50% increases are significant, even for the overheated Seattle-area housing market. Last year, values ​​were up by as much as 18% to 22% in some areas.

The value increases are likely to increase property taxes – but not quite yet.

This year’s property-tax bills are based on last year’s assessed values, and these new values ​​will determine next year’s taxes. The assessor’s office will mail out valuation notices starting this week.

Property taxes won’t increase at the same rate as property values ​​because of the way local taxes are calculated. For example, if your home shot up in value 40%, your tax bill won’t necessarily go up that same amount.

The county hasn’t yet determined next year’s property tax bills, but the hottest local housing markets are likely to see “a double-digit increase,” said King County Assessor John Wilson.

The local housing market has taken off since early in the pandemic, spurred by a combination of few houses for sale, a flood of buyers looking to take advantage of low mortgage interest rates, and a continuing influx of highly paid workers with stock options.

That has driven up home prices across the region, especially outside Seattle. The median price for a single-family house in King County hit nearly $ 1 million last month. The county’s high assessments in areas northeast of the city roughly echo home sales data from the Northwest Multiple Listing Service, which The Seattle Times maps each month.

With mortgage rates on the rise, the market has recently started to show signs of cooling off. But county assessments are based on estimated values ​​as of Jan. 1.

Rising property values ​​have created a windfall for owners looking to sell, but can strain lower-income homeowners who bought long before values ​​rose or tenants whose landlords cite property taxes as a justification for rent hikes.

The county offers property-tax reductions for certain seniors and people with disabilities, but that program has been overwhelmed with applications, forcing people to wait months for a decision.

Property owners can appeal their valuation within 60 days of the date on the card they receive in the mail. Find more information about exemptions and appeals at kingcounty.gov/depts/assessor.

While it may seem unusual, rising property values ​​do not always have a huge effect on property tax bills because of the way local taxes are calculated. Instead, local levies are usually the biggest cause of rising taxes.

The assessor’s office essentially determines how much property tax revenue is owed to various public agencies. The total amount the county generates cannot increase by more than 1% each year, except for voter-approved tax increases such as school and parks levies. Then, to reach that total amount, the assessor determines how much to charge each property owner, based on the value of the property.

When values ​​climb dramatically faster in some areas than others, property owners can see spikes in their bills as the county adjusts the proportional share of total taxes.

That’s what’s happening this year, Wilson said.

“It isn’t a direct ‘my value went up 30% so my taxes will go up 30%,’ but when you hit this magnitude it has some impact,” he said. “We don’t want to kid the public.”

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