Are 90% tax assessment hikes normal? Why Jackson County’s valuations differ from others

Most Jackson County homeowners should have received their 2023 property value assessments by now, and the sticker shock is raising major concerns reminiscent of uproar in 2019. In some cases, homeowners have reported values rising by more than 90% since their last appraisal.

On average, Jackson County officials said homeowners would see an average increase of 30% in values countywide, but many have seen much higher. Property valuations do not have a direct correlation to the property taxes someone will pay, since many taxing jurisdictions like cities and library systems need to take rising values into account when setting tax levies.

What has the county changed since 2019, and is its process different from other counties in the metro or other places with less dramatic increases?

Why are Jackson County’s valuations so high?

Many factors go into a home’s assessed value, but two possible reasons why some Jackson County residents might see jacked-up values in this year’s assessment are the county’s assessment schedule and the county’s track record of undervaluing its properties in the past.

Like every other county in Missouri, Jackson County is bound to a two-year appraisal schedule. That means that when people receive their valuation they are seeing a number that represents the percentage of increase over the past two years. So if the average percent increase was 15% last year and 15% this year, the two-year average will be 30%, which can be a much harder pill to swallow for some property owners.

Since the onset of COVID-19, the market has increased almost double digits every year in places including nearby Johnson County, according to Johnson County appraiser Beau Boisvert. He said the fact that Johnson County does its appraisal annually has helped residents accept changes in the market when they see those increases each year.

Jackson County officials have previously admitted to undervaluing residential properties for decades — to the point that the State Tax Commission said Jackson County was violating state law.

The Jackson County office was valuing properties below 90% of properties’ market values, although Missouri law requires assessments to be within 10% of market value. In 2017, The Star reported that the parcels that make up the Country Club Plaza were worth $375 million, well below the $660 million that it was sold for in 2016.

During the 2019 appraisal year, officials began the process of bringing properties up to market value, which caused outrage among homeowners throughout the county. Neighborhood associations worked with the ACLU and Legal Aid of Western Missouri to sue the county for its valuations, alleging that lower-income Black and brown homeowners were hit the hardest by the increases, at disproportionate rates to wealthier white neighborhoods. But even then, the county said it was assessing properties at 85% of market value.

County assessors say they are still in the process of bringing those valuations closer to market value, which they say is why homeowners continue to see higher values every two years.

How does Jackson County come up with assessment values?

The math used to calculate the value of a home is fairly similar from county to county, according to officials that spoke to The Star. Assessors use a combination of information from the latest home and property sales to determine the most up-to-date value.

Jackson County mainly relies on a software system where staff can input facts about each property, including its square footage, lot size, number of bedrooms and bathrooms, and which of the county’s 1,388 “market areas” it is located in. Then the system spits out a valuation that is sent out to property owners. In some cases, the county will also use home visits and images to help determine a home’s value.

To enhance the accuracy of that information, the county conducted a “parcel by parcel review,” between 2021 and 2023, something it had not done in recent assessment cycles.

Some places set caps on valuation increases

In Missouri, there is no law on the books that caps how much a property’s value can increase by each year. The point of capping assessed property increases is to prevent homeowners from receiving higher tax bills. If a person cannot pay their tax bill, they can risk losing their home entirely.

Places like Michigan and Arkansas cap annual assessment increases at 5%. New Mexico’s is 3%. Texas’ is 10%. South Carolina law prohibits the taxable value of a home from increasing more than 15% over five years.

So if someone’s home in Arkansas is worth $100,000 but its assessed value is $150,000, that owner’s taxes will be calculated using only a 5% increase of the value, or $105,000. Each year the taxable value will continue to increase by 5% until it reaches the $150,000, or its assessed market value, according to Karla Burnett, a spokesperson of Pulaski County’s Assessor’s Office. Pulaski County is one of the biggest counties in Arkansas with more than 182,000 parcels assessed every four years.

“It would take nine years for them to get to the $150,000,” Burnett said, adding that in most cases people will never be taxed for the full value of their home if they remain the primary resident. Once the property is sold at a new value to a new owner, the market value and increase cap essentially reset.

“I think the whole purpose behind the law was to [prevent] somebody’s property taxes from increasing so dramatically that they can no longer afford to live in their house,” Burnett said.

In 2021, Missouri lawmakers tried to pass a bill that would prohibit increasing homeowners’ taxable property values by more than 5% or the rate of inflation — whichever is higher — in each two-year reassessment.

Although Kansas does not have a set cap on how much a property’s value can increase, Johnson County assessors said they try to keep the assessed values below the top of the market value each year.

Johnson County Appraiser Boisvert said that when conducting the countywide reappraisal each year, his team tries to stay around 92% of the market value of a property.

“So here’s a good example, let’s say the house is worth $200,000 and it sells for $250,000. We want to have the average of all the properties in that area at 90% of the $250,000, we don’t want to be right at the top of the market of what they sold for,” Boisvert said.

“We want to be 10% below that for our overall average of all the homes that went up.”

Missouri also requires county’s assessment values to be within 10% of the homes market value.

Johnson County adds transparency to valuation notices

Another tool that Johnson County is using to help residents understand their assessed value pulls the curtain back on the process.

When residents receive their valuation, they also receive a list of three to six similar properties. Johnson County contracts with Tyler Technologies, an Overland Park-based company that allows the county to share relevant information on the assessed value of comparable properties.

“This gives the public a little bit better picture of what we used to compare,” Boisvert said. “Our key pieces for comparison are of course, the age of the building, the size, the livable square footage of the property, the land size, the quality of construction and then what city or location it’s in.”

Jackson County Director of Assessment Gail McCann Beatty told the Star part of the goal in overhauling the assessment process this year was to put in place a system where homeowners receive more comparisons of other homes in the area similar to theirs — and information explaining why they were assessed what they were.

“But we are are still getting those components up and running,” she said. “I would add, though, that if you do come in (to contest your assessment) you can see those comps then.”

Jackson County also contracted Tyler Technologies to improve its appraisal process by adding the “parcel by parcel” review, which was supposed to enhance the accuracy of each valuation and help explain how they arrived at certain home values.

The company examined the exterior of each parcel with an inspection and an image of each home. This way, the county is able to get a better picture of the home’s current condition, according to Jackson County’s website.

Other places freeze home valuations for seniors

Both Kansas and Arkansas have a program for homeowners that are 65 years or older or disabled to prevent spikes in taxable home values.

Arkansas freezes the home valuation for people who are disabled or at least 65. If the person sells the house or makes major improvements, the freeze will no longer apply to that property. Kansas offers a 75% property tax refund to certain homeowners, including low-income seniors 65 years or older.

The Missouri state legislature recently passed a bill that would also freeze the home valuations of low-income property owners who are on social security, but Gov. Parson has yet to sign the bill into law, and it will not have any effect on this year’s valuations.

Some county officials in Missouri are concerned about how the new rule will be implemented when it becomes law.

“I think most assessors in this state would say a homestead exemption is something we need,” Jackson County Assessment Office Director Gail McCann Beatty told the Star. “But we have to make it fair not just for property owners but also school districts that rely on that tax revenue. The way this bill is written, the language is so incredibly vague that I don’t believe it could be implemented even if the governor signs it.”

Clay County officials told The Star that they believe people will greatly benefit from a rule that freezes the assessed home values for low-income senior citizens and are already thinking through how they would implement the program.

How to challenge your valuation

If you want to challenge your most recent assessment, you can file an appeal and request an informal review appointment with Jackson County Assessment Office. In order to get an informal review appointment, you need to file an official appeal. You can log in to do that here. You also can walk into the office at 1300 Washington St. for a value review during its open hours of 8 a.m. until 4 p.m., Monday through Friday, but residents are seeing huge wait times, and some are being turned away.

The deadline to file a formal appeal is Monday, July 10. You can start the process online here. After your appeal is scheduled, you can also request an interior inspection of your home if your property value has risen by more than 15%. You can do this on the county’s website here.

Click here for more tips on how to challenge your assessment.