Sticker shock. New Benton home values have homeowners worried about their tax bill
New Benton County property assessments are out, and some homeowners are feeling shocked by the change in their property’s value over the past year.
The 2023 assessments are based on property sales through the end of 2022, a year of record home price increases in the Tri-Cities.
The median sale price in Benton County climbed $54,000 from 2021. But many homeowners in the median price range of about $432,000, are seeing even bigger jumps in the county’s assessed value of their home.
Washington state law requires appraisals to be brought in line with market values each year, based on what properties actually sold for in the area.
“Got ours yesterday in the mail also. We’re still in shock at the increase from last year’s assessment!” one user posted on the NextDoor app.
Will this impact your tax bill? The simple answer is yes, but it’s not likely to jump the same percentage as your new assessed value.
By now homeowners in Benton County should have received what’s known as a “Change of Valuation” card in the mail. The card should tell you the new assessed value of your home.
Benton County Assessor Bill Spencer told the Herald that this year the county is “playing catch up” with the record market seen over the past few years.
“We took a conservative approach from COVID to this year with increasing values,” Spencer said. “I typically want to be around 95%, we stayed around 90% those three years. To catch up we need to increase more than we normally would year to year.”
Spencer said they had hoped to see the market cool off a little sooner, but for better or worse, the Tri-Cities market is proving more resilient than other areas which already saw markets easing late last year.
“We had the thoughts that things would cool off a lot sooner,” he said. “Things have cooled off, but the market definitely has not dropped yet with the low inventory and prices being where they’re at. Days on market are around 30 days now as opposed to 5 days. We see it leveling out, but we’re not seeing a drop yet.”
Where were the biggest increases
This year, Benton County saw an average jump of about 18%. The largest bump was in Kennewick.
Kennewick averaged 21%.
Richland averaged 17%.
West Richland averaged 18%.
Prosser averaged 13%
Benton City averaged 11%.
By comparison, Franklin County homes were on average undervalued by about 15% this year because the prior assessed values came in at nearly 85% of market value.
The area in Benton County likely to have seen the largest average increases was a neighborhood north of the intersection of East Reata Road and Leslie Road. They saw an average increase of a whopping 29%.
Most of those homes are in the R12 taxing district, which has Richland city taxes but is in the Kennewick School District.
A home on the curve of Bruce Lee Lane jumped 46% in value from $313,000 to almost $457,000, county records show.
A neighbor to the north soared by 52% from $287,000 to $436,000.
Most of the homes in that section of R12 were built in the late ‘80s and early ‘90s and are listed as part of a subdivision named Lorayne J Ranch, for the road that creates the northern boundary between it and Meadow Parke Estates subdivision.
Houses in Meadow Parke Estates, built in the early 2000s, didn’t fare any better. One rose from $416,000 to $517,600.
Another jumped a staggering $148,000 from $345,000 to $493,000.
The first was sold this year in March for $510,000 and the latter was last sold in 2019 for $330,000. That 2023 sale will impact next year’s estimates.
Some of the highest jumps in the area were on Erica Drive where the three homes went up an average of 50%. Homes in that neighborhood are now valued around $550,000.
Similar homes on the street sold for a difference of more than $100,000 in November 2021 and August 2022.
The homes in Meadow Parke area in the R2 taxing district, which climbed an average of 22%.
R2 is a much larger tax area than R12 and is in the Richland school district boundaries. With the Kennewick School District’s operating levy coming back on tax bills this year, homes in Lorayne J Ranch are likely to see a larger tax bill jump than their neighbors to the north.
That average does not mean all homes in the county were undervalued and will be adjusted. If your home value was close to the assessed value, you might not see a change. That’s likely to be the case with many homes sold within the last year or so.
Many of these neighborhoods seeing significant increases are those with homes near the average home sale price, so those previously assessed around the $300,000 to $400,000 range should expect to see their value brought up to the average of homes being sold nearby.
That’s because the barrier to entry in the current market has been steadily increasing since 2020, meaning homebuyers have been snapping up the most affordable homes.
Tax bill impact
In most cases property taxes are due by April 30, but homeowners can pay half up front and the rest by Oct. 31 of each year.
Spencer said that anyone with questions or concerns about their values should contact his office, and they will go over the materials used to determine the value and check for errors.
The assessor’s office has a location in Kennewick at the administration complex at 7122 W. Okanogan Pl.ace, Building E,and at the county courthouse in Prosser, at 620 Market St., by appointment only. They can be reached by phone at 509-786-2046 or by email at assessor@co.benton.wa.us.
Spencer said they’re getting about an average number of calls this year, but noted that they’ve fielded a lot more calls in recent years with the way the housing markets began spiking up in 2020.
“Oh look at that, the reason why the younger generation will never be able to afford property or a house of their own,” one Reddit user wrote about the new assessments.
The good news is that so far this year, home sales have remained level, with median sales prices largely in-line with last year’s ending prices, according to data through July from the Tri-Cities Association of Realtors. If that trend continues, homeowners might not see a big adjustment next year.
The assessed value of a home is based on its market rate, meaning the value it could sell for based on what homes in your area have sold for.
Your home can increase in value through remodeling and renovation or drop in value if damaged in a fire or natural disaster.
Changes in growth in your area also can cause your assessed value to grow or decrease. If your neighborhood suddenly finds itself next to a hot new development, you might expect to see it lift your property’s value as well.
In Washington, counties are divided into zones, and one zone per year will have physical assessments done by county employees. All zones receive updated assessments every year, but the one in-cycle will have records such as photos updated. Updates in the zone physically inspected each year does not impact other zones.
An area is considered “conforming” to the Department of Revenue’s Real Property Ratio if assessed values fall between 90% and 110% of prior year market values.
It’s important to remember that assessed values trail actual sales because of a Jan. 1 cutoff, and may not always reflect current trends happening with market values. So increasing interest rates that have caused a cooling market this year aren’t going to be reflected.
This “Change of Value” will just give you the number which taxing districts will use to base their levies on next year. Levy collection is based on a total amount needed to meet the assigned collection, so the more rooftops added in an area, the smaller your slice of the pie will be.
The assessor doesn’t set your property taxes, though.
They’re set by the individual taxing districts where your home is located, so the amount due each year can vary based on many factors such as levies, bonds, public safety and other taxing districts.
Typically changes to property taxes require voter approval. In Washington levy collection is capped at a 1% increase per year from the prior year’s budget unless voters approve collection beyond that 1%.
That 1% increase is based on the county’s budget, not individual tax bills. That means more rooftops helps limit the increase in property taxes from year to year because the increase is split among all households.
Kennewick levy concerns
One Kennewick neighborhood saw increases of almost $100,000 for every home on a block.
A homeowner told the Herald their value went up by almost a quarter on a home assessed at about $308,000 last year. They’re looking at an assessment of more than $390,000 now.
The neighbor on one side of the street went from $311,000 to $395,000, the other side rose from $338,000 to $431,000.
That does not mean your property taxes will go up 30%, but they will still increase.
Homeowners in Kennewick School District are expecting a big increase after a year without a operating levy.
Kennewick’s levy failed in 2022 and was only recently passed by voters, meaning those residents saw a year without a school levy tax — about $1.73 for every $1,000 in taxable value. That amounts to about $700 annually on a property valued of $400,000.
In Benton County, the average homeowner has about a dozen separate levies for a combined total from $7 and $10 per $1,000 of assessed value.
That means tax bills in Kennewick last year were about $1,000 lower than in Richland on the median valued home. The largest portion of that difference was the missing Kennewick school levy.
Tax exemptions
Some homeowners also will become eligible for exemptions this year. That could be because of factors such as being 61 or older, disability or because income requirements have shifted.
The number of homeowners eligible for exemptions is going to expand, as the income requirement raises along with the median household income of the county.
A variety of factors can play into whether someone is eligible for an exemption, and then the amount can vary by levels of qualification.
For example, a person at the lowest level can qualify for exemption from municipal and school excess levies. Higher levels exempt a homeowner from the excess levies, plus taxes on a portion of the regular levy for as much as 60% of the home’s assessed value.
The state also offers deferrals for homeowners with qualifying events such as loss of income or disability.
