@Jim @Scott - that's a 22% decline (average) in FCV - in one year. True market values are down in Phoenix (generally speaking) almost 50% off the peak of 2005/06. The Phoenix real estate market is one of the hardest hit in the country. Of course we had an unprecedented run up, but still "not too bad" and "hasn't been hit too hard" wouldn't be my choice of words for the Phoenix market. You should drive through some neighborhoods where 60% of the listings are foreclosures or short sales, or see the look on a homeowners face when you tell them the new home they bought in 2006 for $280K should be listed for $105K.

@Sheldon - you're correct in that there is no easy way to compare assessments within a given area (short of searching public record, which would be excruciating). As someone who has looked at a LOT of assessed values, I can say that they generally are "fair" (fair as in homes that have a higher market value almost always have a higher assessed value).

If, and it's a big if I should have clarified in the post, all things are held equal, when the FCV is lowered, your overall property tax will be reduced. *IF* all things are held equal (particularly the formulas and tax rates). BUT, local governments -- despite glaring evidence to the contrary -- are not stupid. When they know that assessed values have dropped, they are going to want to do something to shore up their tax base. And they can get very creative in how that's done.

It is sad to see the drops in house values on that chart-but it seems your area hasn't been hit too hard; hopefully this will all get better soon!

I honestly don't know much about the FCV and the LPV and how the related to each other and to how much you pay. But I found out the hard way that property taxes don't have anything to do with the assessed value of your house. I guess as long as the assessments of the houses in your neighborhood or city or however they divide it up are fair then I'm paying the right amount. To me, for the number that gets mailed to you to have meaning you really need to be able to compare your 4 bedroom/2 bath single story to the 5/3 two story across the street. In theory the bigger house is worth more and pays more in property taxes. But since we are not told how the assessments are done or what the assessments of the houses around us are we have no idea if we are paying our fair share. Sure, we can look them up online and try to figure it all out but who has the time? I live in Gilbert and the tax assessment for my house went up by 33% in one year and it was because of a PKID . . . I'm still trying to understand that. But basically the neighborhood voted for improvements and so everyone in the neighborhood has to pay (I just recently purchased the house but noticed the jump during my research).

But I wrote here mainly to try and squash the *myth* that if your property value goes down so does your property taxes!

Sheldon

I didn't see your comment before I wrote mine (above), so you have answered my questions to Jay. Very well stated. Thanks.

Jay

It was an excellent article in spite of the "Fair vs. Full" typo. But in Maricopa County, aren't there are two values that we need to consider when considering the property tax aspect? The Full Cash Value (FCV) may go down (as shown by the above table); but the Limited Property Value (LPV) will always increased. And the total property tax is based on both values. I don't know what the tax rate is on either value, but is it possible that our total 2010 tax bill doesn't decrease, in spite of the FCV decreasing?

The value of your home doesn't determine what you taxes are going to be and a lower home value doesn't mean lower taxes even if it is for 2010. Taxes for everyone went up during the boom because of spending by the government, not because of home values. Taxes will go down in 2010 because government spending will go down. The value of your home determines your *share* of the spending that happens. So, if the value of your house goes down chances are all house values went down and therefor, your share of the pie is unchanged. The only way to have a lower tax bill is for the overall budget of the government to be lower and the only way to get that lower is to demand that the government cut spending.

Zoot - You are absolutely correct! I've edited the post. I'm not real sure what I was thinking when I typed "fair"...

Doesn't FCV stand for Full Cash Value, and not Fair Cash Value?

I am really surprised to hear that even if the value of the house goes down, the tax won't. All should unite and protect against this greedy act of country Assessor's office.

You can actually lower your property taxes. Contact the Assessor's office to find out how you can have your value lowered.

**jenna´s last blog post..Business Plan</abbr></abbr>

It is very hard to tell a home seller their home is not worth now what they paid for it only a year ago; I do hope this Make Home Affordable plan can make a difference for a lot of people.

Jim Scott - that's a 22% decline (average) in FCV - in one year. True market values are down in Phoenix (generally speaking) almost 50% off the peak of 2005/06. The Phoenix real estate market is one of the hardest hit in the country. Of course we had an unprecedented run up, but still "not too bad" and "hasn't been hit too hard" wouldn't be my choice of words for the Phoenix market. You should drive through some neighborhoods where 60% of the listings are foreclosures or short sales, or see the look on a homeowners face when you tell them the new home they bought in 2006 for $280K should be listed for $105K.

@Sheldon - you're correct in that there is no easy way to compare assessments within a given area (short of searching public record, which would be excruciating). As someone who has looked at a LOT of assessed values, I can say that they generally are "fair" (fair as in homes that have a higher market value almost always have a higher assessed value).

If, and it's a big if I should have clarified in the post, all things are held equal, when the FCV is lowered, your overall property tax will be reduced. *IF* all things are held equal (particularly the formulas and tax rates). BUT, local governments -- despite glaring evidence to the contrary -- are not stupid. When they know that assessed values have dropped, they are going to want to do something to shore up their tax base. And they can get very creative in how that's done.

It is sad to see the drops in house values on that chart-but it seems your area hasn't been hit too hard; hopefully this will all get better soon!

I honestly don't know much about the FCV and the LPV and how the related to each other and to how much you pay. But I found out the hard way that property taxes don't have anything to do with the assessed value of your house. I guess as long as the assessments of the houses in your neighborhood or city or however they divide it up are fair then I'm paying the right amount. To me, for the number that gets mailed to you to have meaning you really need to be able to compare your 4 bedroom/2 bath single story to the 5/3 two story across the street. In theory the bigger house is worth more and pays more in property taxes. But since we are not told how the assessments are done or what the assessments of the houses around us are we have no idea if we are paying our fair share. Sure, we can look them up online and try to figure it all out but who has the time? I live in Gilbert and the tax assessment for my house went up by 33% in one year and it was because of a PKID . . . I'm still trying to understand that. But basically the neighborhood voted for improvements and so everyone in the neighborhood has to pay (I just recently purchased the house but noticed the jump during my research).

But I wrote here mainly to try and squash the *myth* that if your property value goes down so does your property taxes!

..

Sheldon

I didn't see your comment before I wrote mine (above), so you have answered my questions to Jay. Very well stated. Thanks.

Jay

It was an excellent article in spite of the "Fair vs. Full" typo. But in Maricopa County, aren't there are two values that we need to consider when considering the property tax aspect? The Full Cash Value (FCV) may go down (as shown by the above table); but the Limited Property Value (LPV) will always increased. And the total property tax is based on both values. I don't know what the tax rate is on either value, but is it possible that our total 2010 tax bill doesn't decrease, in spite of the FCV decreasing?

The value of your home doesn't determine what you taxes are going to be and a lower home value doesn't mean lower taxes even if it is for 2010. Taxes for everyone went up during the boom because of spending by the government, not because of home values. Taxes will go down in 2010 because government spending will go down. The value of your home determines your *share* of the spending that happens. So, if the value of your house goes down chances are all house values went down and therefor, your share of the pie is unchanged. The only way to have a lower tax bill is for the overall budget of the government to be lower and the only way to get that lower is to demand that the government cut spending.

Zoot - You are absolutely correct! I've edited the post. I'm not real sure what I was thinking when I typed "fair"...

Doesn't FCV stand for Full Cash Value, and not Fair Cash Value?

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I am really surprised to hear that even if the value of the house goes down, the tax won't. All should unite and protect against this greedy act of country Assessor's office.

You can actually lower your property taxes. Contact the Assessor's office to find out how you can have your value lowered.

**jennau00c2u00b4s last blog post..Business Plan</abbr></abbr>

thank you r the up date