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Home prices in NW Arkansas are still falling, but the decline is less than in the recent past. In fact, we may be nearing the bottom of the market, but we won’t know that until after that moment has passed. Nevertheless, July is generally when property tax notices for the coming year go out, so residents may find that the value given their property does not conform to current market conditions.
In Washington and Benton County, Arkansas, assessments are normally done every three years. And appeals normally are accepted during the month of July and part of August. However, this year is an assessment year in Washington County, so notices will be sent out to all property owners during the first two weeks of July with the new assessed values. There will be instructions on the notices on how to appeal if you think your taxes are too high, compared to the market value. The latest date for appeal will be August 18.
In Benton County, next year is the assessment year. Tax notices this year will go out in early July and residents may call to schedule appointments to appeal their property tax bill from July 15 to the 3rd Monday in August. The Benton County website has a special page on the appeals process for that county.
One thing to keep in mind is that Washington County Assessor’s Office personnel are aware that we are in a declining real estate market and will be reassessing accordingly. Another is that in Arkansas on one’s principal residence, there is a $350 annual Homestead Credit. You only have to apply once for this and then it is subtracted every year as long as you live in the home. Also there are caps for senior citizens and tax breaks for disabled veterans.
Washington County also has established a website, explainmypropertytax.org, where county residents can obtain answers to their property tax questions. Once notices have gone out by mid-July, it will be possible for property owners to obtain information about their properties and taxes on that website. At this time, only general explanatory information about the tax and appeal process is available.
Showing posts with label property taxes. Show all posts
Showing posts with label property taxes. Show all posts
Wednesday, June 16, 2010
Sunday, May 02, 2010
Bentonville Schools Millage Increase Passes with Ease
No one likes higher taxes, but sometimes they are necessary to provide for important things—things like a good education for our kids. And in the case of NW Arkansas, sometimes those higher taxes also contribute to the high quality of life for which our area keeps getting kudos and recommendations from a variety of sources nationwide.
On this occasion, I want to commend the voters in Bentonville School District for passing a 3.6 mil increase in property taxes. The increase will provide $70 million for a new K-6 elementary school and junior high school as well as funds for maintenance throughout the district. The voter turnout was high and the increase passed with approval of about 60% of voters.
It is not easy to have proposals to raise taxes pass voter muster in this difficult economy. Fayetteville School District saw the proof of that last year when their millage increase proposal was defeated.
But a look at the bigger picture confirms that the continued growth of our area (and our state) depends on having an educated base of employees. A good education and promotion of schools is essential to development of the area and contributes to quality of life of its citizens.
Good schools also add value to real estate. Two identical houses, one in a highly rated school district and the other in a lower rated district, will have different values due to those ratings.
Springdale School District is seriously considering asking voters to approve a 1.9 mil increase this year to build new schools and improve athletic facilities. If that proposal passes, the district will qualify for $15 million from the Arkansas Department of Education’s Facilities Partnership Program.
And last but not least, Fayetteville has totally revamped its priorities and hopes to get a millage increase passed this year. If so, the district could also receive funds from the state’s Facilities Partnership Program.
Bentonville voters have set the new standard. Their vote denotes a populace that recognizes the importance of education. They “get it.”
On this occasion, I want to commend the voters in Bentonville School District for passing a 3.6 mil increase in property taxes. The increase will provide $70 million for a new K-6 elementary school and junior high school as well as funds for maintenance throughout the district. The voter turnout was high and the increase passed with approval of about 60% of voters.
It is not easy to have proposals to raise taxes pass voter muster in this difficult economy. Fayetteville School District saw the proof of that last year when their millage increase proposal was defeated.
But a look at the bigger picture confirms that the continued growth of our area (and our state) depends on having an educated base of employees. A good education and promotion of schools is essential to development of the area and contributes to quality of life of its citizens.
Good schools also add value to real estate. Two identical houses, one in a highly rated school district and the other in a lower rated district, will have different values due to those ratings.
Springdale School District is seriously considering asking voters to approve a 1.9 mil increase this year to build new schools and improve athletic facilities. If that proposal passes, the district will qualify for $15 million from the Arkansas Department of Education’s Facilities Partnership Program.
And last but not least, Fayetteville has totally revamped its priorities and hopes to get a millage increase passed this year. If so, the district could also receive funds from the state’s Facilities Partnership Program.
Bentonville voters have set the new standard. Their vote denotes a populace that recognizes the importance of education. They “get it.”
Tuesday, October 06, 2009
Deadline to Pay Property Taxes is October 13, 2009
The normal deadline for paying property taxes and personal property taxes is October 10th each year but because the 10th is a Saturday, 11th a Sunday, and Monday the 12th is a Holiday, there is a small reprieve.
Many homeowners pay their taxes as part of their monthly mortgage payment. The annual tax is divided into 12 and the homeowner pays 1/12 each month. The bank holds the tax portion of the payment and then pays the property tax when due. If this is your situation, you can relax since your property taxes have already been paid.
But if you don’t have a mortgage or don’t pay taxes as part of your mortgage, be aware October 13th is rapidly approaching.
When the bills were sent out last spring, they included an option to pay taxes in three payments. If you took advantage of that, don’t forget the third and final payment.
Personal property taxes on cars, trucks, boats, etc., are also due October 13th.
Late payments incur an automatic 10% penalty plus interest.
You can pay your taxes in person but in Washington County this year that is rather inconvenient due to very limited parking. The parking garage is being demolished and a new one will be operational next year. In addition to paying in person or mailing a check, both Benton and Washington Counties offer an ePayment Service. You can pay by Visa, MasterCard, Discover or American Express credit card. Washington County also accepts payment via eCheck - a method of debiting the funds electronically from your checking account just as though you had written a check.
However, be advised that if you use any of the methods just mentioned, you will incur a processing fee. The county websites state, “Because we are a governmental entity, all costs associated with the convenience of credit card usage and bank account transfers cannot be deducted from your tax amount due.”
The web addresses for paying online are:
https://www.ark.org/washingtoncounty/index.php
https://www.ark.org/bentoncounty/index.php
Many homeowners pay their taxes as part of their monthly mortgage payment. The annual tax is divided into 12 and the homeowner pays 1/12 each month. The bank holds the tax portion of the payment and then pays the property tax when due. If this is your situation, you can relax since your property taxes have already been paid.
But if you don’t have a mortgage or don’t pay taxes as part of your mortgage, be aware October 13th is rapidly approaching.
When the bills were sent out last spring, they included an option to pay taxes in three payments. If you took advantage of that, don’t forget the third and final payment.
Personal property taxes on cars, trucks, boats, etc., are also due October 13th.
Late payments incur an automatic 10% penalty plus interest.
You can pay your taxes in person but in Washington County this year that is rather inconvenient due to very limited parking. The parking garage is being demolished and a new one will be operational next year. In addition to paying in person or mailing a check, both Benton and Washington Counties offer an ePayment Service. You can pay by Visa, MasterCard, Discover or American Express credit card. Washington County also accepts payment via eCheck - a method of debiting the funds electronically from your checking account just as though you had written a check.
However, be advised that if you use any of the methods just mentioned, you will incur a processing fee. The county websites state, “Because we are a governmental entity, all costs associated with the convenience of credit card usage and bank account transfers cannot be deducted from your tax amount due.”
The web addresses for paying online are:
https://www.ark.org/washingtoncounty/index.php
https://www.ark.org/bentoncounty/index.php
Sunday, July 19, 2009
Benton County Property Taxes Lowered for Some
Benton County has lowered values on some residential real estate by more than $2.5 million dollars. That means about 38,000 people will see their tax bills lowered for 2009. Note that 2008 taxes, which must be paid in full by October 10, 2009 will not be affected.
The move was a result of a report by an independent appraiser that Benton County had hired due to the public outcry on reassessments. The adjustments were limited to residences in towns and cities, not business or commercial properties or rural residences, since the majority of devaluations were residential properties located in cities, according to the report.
The county is under no obligation to send notices of the adjustments to owners via U.S. Mail. To find out if your property is affected, you need to go online http://www.co.benton.ar.us/BentonCountyNews.aspx?id=22 and fill out a short form.
If you wish to appeal the assessment on your home, you need to contact the Benton County Assessor at 479-271-1000 between July 20 and August 17 to make an appointment with the board of equalization.
Washington County property owners take heart. The county assessor is seeking permission to begin a similar process. If she receives the go-ahead, it’s possible homeowners and landlords may see tax relief next year.
You can call the Washington County Assessor’s Office now at 479-444-1500 if you wish to appeal the appraised value on your property.
For more information:
http://www.nwaonline.net/articles/2009/07/08/news/070909bzequalization.txt
The move was a result of a report by an independent appraiser that Benton County had hired due to the public outcry on reassessments. The adjustments were limited to residences in towns and cities, not business or commercial properties or rural residences, since the majority of devaluations were residential properties located in cities, according to the report.
The county is under no obligation to send notices of the adjustments to owners via U.S. Mail. To find out if your property is affected, you need to go online http://www.co.benton.ar.us/BentonCountyNews.aspx?id=22 and fill out a short form.
If you wish to appeal the assessment on your home, you need to contact the Benton County Assessor at 479-271-1000 between July 20 and August 17 to make an appointment with the board of equalization.
Washington County property owners take heart. The county assessor is seeking permission to begin a similar process. If she receives the go-ahead, it’s possible homeowners and landlords may see tax relief next year.
You can call the Washington County Assessor’s Office now at 479-444-1500 if you wish to appeal the appraised value on your property.
For more information:
http://www.nwaonline.net/articles/2009/07/08/news/070909bzequalization.txt
Saturday, July 11, 2009
Mixed Feelings About Proposal for Fayetteville’s New High School
I have mixed feelings about the proposal to build a new high school for some 3,000 future students on the site of the existing high school in Fayetteville - and the 4.9 mill tax increase it will take to build it. Perhaps the best way to express my feelings is in the form of questions…
Given the current economic factors, what are the chances of taxpayers approving a measure that would increase their property taxes by almost $165 annually? The Washington County Assessor says taxes on an average house in Fayetteville (valued at $166,075) are currently $1425. The last time I checked, Fayetteville school taxes were the highest in NW Arkansas.
It’s expected those 4.9 mills will be on the tax bills for 30 years and when the economy improves and property values start increasing again, the $165 will go up in accordingly.
The strange thing about taxes is that they seldom if ever go down. By the time 30 years has passed no one seems to remember the increase was scheduled to stop. It’s usually a case of “Let’s continue those mils because we have many needs to fulfill.”
Fayetteville voters have, in recent years, been reluctant to pass millage increases. The largest millage increase passed by voters in the past 20+ years was 4% and many a proposal has been defeated.
Is it truly in the best interest of all parties to build the new school on the current site? I know public meetings were held with all sorts of factors and wishes considered but I sometimes think a better choice would be to build on a more level site to lower costs and remove disruptive construction activities while classes are in session.
I also think many taxpayers will readily recall the fact that the Fayetteville school board had the opportunity to sell the existing high school site to University of Arkansas for $50 million – money that would have gone a long way towards the cost of a new school at a different location and a much lower tax increase.
Fayetteville always wants something better than surrounding areas to set it apart - but at what cost? Is it really necessary to demolish the addition built in 1991 because to remodel it is not good enough for Fayetteville? Rogers used part of an existing site when it built a new high school and saved their taxpayers a good piece of change.
But the most interesting aspect of the entire proposal is this: $83 million to build the school but the school district is asking for $113 million – a difference of $30 million they say is needed for furnishings, specialized construction of classrooms, technology, staffing, and other operation costs.
Fayetteville’s proposal to build five smaller, friendlier buildings instead of one big building also adds to the cost plus the district says it will need more staffing for five buildings than it would for one large school.
Let’s look at the cost per student of Fayetteville’s proposal. At $83 million amount, that’s estimated to be $27,667 per student. At $113 million, that’s $37,667 per student. Springdale’s cost per student was $18,619, Rogers was $15,600 per student, and Bentonville came in at $17,534.
How much extra will it cost to make the new school LEED (Leadership in Energy and Environmental Design) compliant? The LEED Council says schools built to their standards use approximately 1/3 less energy and water and create some 75% less solid waste. The Council estimates building to LEED standards adds about 2% to construction costs. Everyone is thinking about the environment these days and Fayetteville as a whole is trying to go ‘green,’ so the LEED certification certainly seems desirable.
No one wants higher property taxes but everyone wants the best school possible. Now that I’ve just written that sentence, it screams out at me – COMPROMISE! Let’s build the best school we can afford!
Fayetteville is a great place to live, work and raise a family but does it need the most expensive public school ever built in our state? I really have trouble justifying the money it will take to earn that distinction.
I think the district has much hard work ahead to sell this proposal to the taxpayers. There’s a lot to consider before the September election.
For more information:
http://www.nwarktimes.com/nwat/News/77657
http://www.nwaonline.net/articles/2009/06/25/news/062609fzfayschlbrd.txt
http://www.nwaonline.net/articles/2009/06/18/columns/brenda_blagg/061909blagg.txt
http://www.nwarktimes.com/nwat/News/77779
http://www.fayar.net/community/p21ccharetteinfo.html
http://www.nwarktimes.com/nwat/News/77972/
http://www.nrdc.org/buildinggreen/leed.asp
Given the current economic factors, what are the chances of taxpayers approving a measure that would increase their property taxes by almost $165 annually? The Washington County Assessor says taxes on an average house in Fayetteville (valued at $166,075) are currently $1425. The last time I checked, Fayetteville school taxes were the highest in NW Arkansas.
It’s expected those 4.9 mills will be on the tax bills for 30 years and when the economy improves and property values start increasing again, the $165 will go up in accordingly.
The strange thing about taxes is that they seldom if ever go down. By the time 30 years has passed no one seems to remember the increase was scheduled to stop. It’s usually a case of “Let’s continue those mils because we have many needs to fulfill.”
Fayetteville voters have, in recent years, been reluctant to pass millage increases. The largest millage increase passed by voters in the past 20+ years was 4% and many a proposal has been defeated.
Is it truly in the best interest of all parties to build the new school on the current site? I know public meetings were held with all sorts of factors and wishes considered but I sometimes think a better choice would be to build on a more level site to lower costs and remove disruptive construction activities while classes are in session.
I also think many taxpayers will readily recall the fact that the Fayetteville school board had the opportunity to sell the existing high school site to University of Arkansas for $50 million – money that would have gone a long way towards the cost of a new school at a different location and a much lower tax increase.
Fayetteville always wants something better than surrounding areas to set it apart - but at what cost? Is it really necessary to demolish the addition built in 1991 because to remodel it is not good enough for Fayetteville? Rogers used part of an existing site when it built a new high school and saved their taxpayers a good piece of change.
But the most interesting aspect of the entire proposal is this: $83 million to build the school but the school district is asking for $113 million – a difference of $30 million they say is needed for furnishings, specialized construction of classrooms, technology, staffing, and other operation costs.
Fayetteville’s proposal to build five smaller, friendlier buildings instead of one big building also adds to the cost plus the district says it will need more staffing for five buildings than it would for one large school.
Let’s look at the cost per student of Fayetteville’s proposal. At $83 million amount, that’s estimated to be $27,667 per student. At $113 million, that’s $37,667 per student. Springdale’s cost per student was $18,619, Rogers was $15,600 per student, and Bentonville came in at $17,534.
How much extra will it cost to make the new school LEED (Leadership in Energy and Environmental Design) compliant? The LEED Council says schools built to their standards use approximately 1/3 less energy and water and create some 75% less solid waste. The Council estimates building to LEED standards adds about 2% to construction costs. Everyone is thinking about the environment these days and Fayetteville as a whole is trying to go ‘green,’ so the LEED certification certainly seems desirable.
No one wants higher property taxes but everyone wants the best school possible. Now that I’ve just written that sentence, it screams out at me – COMPROMISE! Let’s build the best school we can afford!
Fayetteville is a great place to live, work and raise a family but does it need the most expensive public school ever built in our state? I really have trouble justifying the money it will take to earn that distinction.
I think the district has much hard work ahead to sell this proposal to the taxpayers. There’s a lot to consider before the September election.
For more information:
http://www.nwarktimes.com/nwat/News/77657
http://www.nwaonline.net/articles/2009/06/25/news/062609fzfayschlbrd.txt
http://www.nwaonline.net/articles/2009/06/18/columns/brenda_blagg/061909blagg.txt
http://www.nwarktimes.com/nwat/News/77779
http://www.fayar.net/community/p21ccharetteinfo.html
http://www.nwarktimes.com/nwat/News/77972/
http://www.nrdc.org/buildinggreen/leed.asp
Saturday, March 07, 2009
Benton County Homeowners to Receive a Break on Property Taxes—Yeah!
Benton County will be lowering values on residential properties by 2% - 6%. The percentages vary by area. Northeast Benton County will decrease by 6%, the southwest portion of the county will decrease by 2%, and other areas will be between those two figures.
When homeowners received their property assessments in 2008 there were thousands of unhappy people. By law, those values were based on 2005-2007 sales when prices were rapidly escalating. Thousands of appeals were filed, which resulted in many lowered valuations.
Now that property values have decreased again the county assessor is taking the first steps to lower appraisals.
This is a bit of good news for homeowners who are seeing the value of their homes shrink.
Commercial and industrial property appraisals will remain unchanged.
Note: In Arkansas, counties assess properties every third year. Thus, the next reappraisal was not scheduled until 2011. (For more details about the hows and whys of Arkansas appraisals, see my blog “Benton County Reappraisal Process is Complete” which I posted July 19, 2008.)
For more information:
http://www.nwaonline.net/articles/2009/03/02/news/030309bzequalization.txt
http://www.nwarktimes.com/adg/News/253986/
When homeowners received their property assessments in 2008 there were thousands of unhappy people. By law, those values were based on 2005-2007 sales when prices were rapidly escalating. Thousands of appeals were filed, which resulted in many lowered valuations.
Now that property values have decreased again the county assessor is taking the first steps to lower appraisals.
This is a bit of good news for homeowners who are seeing the value of their homes shrink.
Commercial and industrial property appraisals will remain unchanged.
Note: In Arkansas, counties assess properties every third year. Thus, the next reappraisal was not scheduled until 2011. (For more details about the hows and whys of Arkansas appraisals, see my blog “Benton County Reappraisal Process is Complete” which I posted July 19, 2008.)
For more information:
http://www.nwaonline.net/articles/2009/03/02/news/030309bzequalization.txt
http://www.nwarktimes.com/adg/News/253986/
Saturday, October 04, 2008
Property Taxes are Due
Just a quick reminder that the deadline to pay property taxes is October 10.
Many home owners pay their taxes as part of their monthly mortgage payment. The annual tax is divided into 12 and the homeowner pays 1/12 each month. When tax bills are sent out in the spring, the bank pays the property tax. If this is your situation, you can relax since your property taxes have already been paid.But if your bank is not paying your property taxes as part of your mortgage and you didn't pay them last spring when the bills were sent out, then you only have a few more days to pay them. And don’t forget those pesky personal property taxes on cars, trucks, boats, etc. Those taxes are also due now, if you didn't already pay them when you got your bill last spring.
There was an option to pay taxes in three payments so if you took advantage of that, don’t forget the third and final payment is due October 10.
Late payments incur an automatic 10% penalty plus interest.
In addition to paying in person or mailing a check, Washington County offers an ePayment Service. You can pay with a Visa, MasterCard or Discover credit card and the funds will be electronically deducted from your checking account. The important thing to note if using this service is a processing fee will also be deducted. The county website states, “Because we are a governmental entity, all costs associated with the convenience of credit card usage and bank account transfers cannot be deducted from your tax amount due.”
As best I could determine, Benton County does not offer an ePayment Service but you can pay over the telephone, in person, or snail-mail.
The web addresses for Washington and Benton counties are:
http://www.co.washington.ar.us
http://www.co.benton.ar.us
Many home owners pay their taxes as part of their monthly mortgage payment. The annual tax is divided into 12 and the homeowner pays 1/12 each month. When tax bills are sent out in the spring, the bank pays the property tax. If this is your situation, you can relax since your property taxes have already been paid.But if your bank is not paying your property taxes as part of your mortgage and you didn't pay them last spring when the bills were sent out, then you only have a few more days to pay them. And don’t forget those pesky personal property taxes on cars, trucks, boats, etc. Those taxes are also due now, if you didn't already pay them when you got your bill last spring.
There was an option to pay taxes in three payments so if you took advantage of that, don’t forget the third and final payment is due October 10.
Late payments incur an automatic 10% penalty plus interest.
In addition to paying in person or mailing a check, Washington County offers an ePayment Service. You can pay with a Visa, MasterCard or Discover credit card and the funds will be electronically deducted from your checking account. The important thing to note if using this service is a processing fee will also be deducted. The county website states, “Because we are a governmental entity, all costs associated with the convenience of credit card usage and bank account transfers cannot be deducted from your tax amount due.”
As best I could determine, Benton County does not offer an ePayment Service but you can pay over the telephone, in person, or snail-mail.
The web addresses for Washington and Benton counties are:
http://www.co.washington.ar.us
http://www.co.benton.ar.us
Saturday, July 19, 2008
Benton County Reappraisal Process is Complete
I no sooner posted the article (see blog posted July 12) than Benton County completed its appraisal process for property taxes.
Values are up – way up in some cases – and people are not happy. The total value of property in Benton County’ increased from $2.9 billion in 2005 to more than $4 billion this year. That includes increases in value of existing properties as well as new construction.
What many folks haven’t taken in to consideration is the fact that the last reappraisal was in 2005 and values have certainly risen since then, although not at the double-digit rates of the past several years. Instead, they seem to be looking only at the past year or so when values started coming down from their all-time high.
There is so much bad news these days it’s easy to get caught up in the doom and gloom. However, NW Arkansas is still growing and adding jobs, though not as rapidly as in the past.
As I’ve said before, real estate is local. You can’t look at California (or Florida or Nevada), for instance, and assume the same thing is happening here.
Arkansas law does provide important benefits to homeowners.
The increase in assessed value on a person’s homestead is capped at 5% per year. Thus, if the assessed valuation of the owner’s personal residence increased 9% over 2005 value, the 2009 value would be capped at 5%. It would be 2010 before the remaining 4% took effect.
Another advantage helps homeowners age 65 or older and those considered disabled as defined by Social Security Administration. It prevents the taxable assessment on an owner’s personal residence from ever increasing due to a reappraisal. Taxes can go up if improvements are made to the property or if millage rates go up, but not because of periodic increase in value.
In other words, all you have to do is notify the county assessor once you reach age 65 or become disabled and your taxable assessed valuation will be frozen forever (at least as long as you live in the same house).
(I’ve included below links to the application forms for both Benton and Washington counties.)
The new assessments will take effect January 1, 2009 with taxes due October 10, 2009.
Taxpayers can appeal the new valuation to the Benton County Equalization Board. You must make an appointment before August 20.
For more information:
Benton County Assessor’s office: 479-271-1037
http://www.nwanews.com:80/adg/News/231396/
http://www.co.benton.ar.us/Assessor/HomesteadApp.pdf
http://www.co.washington.ar.us/Assessor/Am79.htm
Values are up – way up in some cases – and people are not happy. The total value of property in Benton County’ increased from $2.9 billion in 2005 to more than $4 billion this year. That includes increases in value of existing properties as well as new construction.
What many folks haven’t taken in to consideration is the fact that the last reappraisal was in 2005 and values have certainly risen since then, although not at the double-digit rates of the past several years. Instead, they seem to be looking only at the past year or so when values started coming down from their all-time high.
There is so much bad news these days it’s easy to get caught up in the doom and gloom. However, NW Arkansas is still growing and adding jobs, though not as rapidly as in the past.
As I’ve said before, real estate is local. You can’t look at California (or Florida or Nevada), for instance, and assume the same thing is happening here.
Arkansas law does provide important benefits to homeowners.
The increase in assessed value on a person’s homestead is capped at 5% per year. Thus, if the assessed valuation of the owner’s personal residence increased 9% over 2005 value, the 2009 value would be capped at 5%. It would be 2010 before the remaining 4% took effect.
Another advantage helps homeowners age 65 or older and those considered disabled as defined by Social Security Administration. It prevents the taxable assessment on an owner’s personal residence from ever increasing due to a reappraisal. Taxes can go up if improvements are made to the property or if millage rates go up, but not because of periodic increase in value.
In other words, all you have to do is notify the county assessor once you reach age 65 or become disabled and your taxable assessed valuation will be frozen forever (at least as long as you live in the same house).
(I’ve included below links to the application forms for both Benton and Washington counties.)
The new assessments will take effect January 1, 2009 with taxes due October 10, 2009.
Taxpayers can appeal the new valuation to the Benton County Equalization Board. You must make an appointment before August 20.
For more information:
Benton County Assessor’s office: 479-271-1037
http://www.nwanews.com:80/adg/News/231396/
http://www.co.benton.ar.us/Assessor/HomesteadApp.pdf
http://www.co.washington.ar.us/Assessor/Am79.htm
Saturday, July 12, 2008
Is Your Home Over-Appraised?
By law in Arkansas, each county must appraise all real estate every three years. When values are increasing, as they have been in NW Arkansas for many years, that timetable actually gives a break to property owners. A home appraised at $125,000 in 2004 stayed at that appraised value in years 2005 and 2006 even as the actual value increased to $150,000 or more.
Washington County completed its reappraisals in 2007, which in retrospect appears to be when property values hit the top.
Since then, some properties have actually lost value. I know because my old home, which I just sold in May, was appraised by the county for tax purposes at $195,000. I had it listed in the MLS for $179,900. It sold for slightly less.
Speculators have gone elsewhere looking for the next boom and left behind empty homes and empty lots. Builders desperate to get out from under their construction loans are pricing homes on the lower end of any price ranges of recently sold similar homes.
With the next appraisal in Washington County not set to occur until 2010, the county assessor has taken the unusual step of asking and receiving permission of the county’s Equalization Board to examine the situation.
There are more than 90,000 properties in the county and not all properties will be reexamined.
The target will most likely be subdivisions with homes costing more than $200,000. The plan is to compare homes sold in those subdivisions with the appraised value assigned in the same neighborhood on Jan. 1, 2007.
For example, if a home appraised at $200,000 actually sold for $190,000 and that pattern is repeated on several homes in the neighborhood, the appraised value would drop $10,000. A reduction of that amount would decrease property taxes by roughly $100. (Annual property taxes are about 1 percent of a home’s value.)
In my opinion, this is the fair thing to do and I commend Washington County for taking the high road. Things would probably work themselves out at the next scheduled reappraisals in 2010, but meanwhile some people would be paying more than their fair share of taxes.
Incidentally, properties in Benton County are currently undergoing their scheduled reappraisals, which will set property values beginning Jan. 1, 2009. We would expect those values to be indicative of current values.
For more information:
http://www.nwanews.com:80/adg/News/230807/
http://www.nwaonline.net/articles/2008/07/10/columns/brenda_blagg/071108blagg.txt
Washington County completed its reappraisals in 2007, which in retrospect appears to be when property values hit the top.
Since then, some properties have actually lost value. I know because my old home, which I just sold in May, was appraised by the county for tax purposes at $195,000. I had it listed in the MLS for $179,900. It sold for slightly less.
Speculators have gone elsewhere looking for the next boom and left behind empty homes and empty lots. Builders desperate to get out from under their construction loans are pricing homes on the lower end of any price ranges of recently sold similar homes.
With the next appraisal in Washington County not set to occur until 2010, the county assessor has taken the unusual step of asking and receiving permission of the county’s Equalization Board to examine the situation.
There are more than 90,000 properties in the county and not all properties will be reexamined.
The target will most likely be subdivisions with homes costing more than $200,000. The plan is to compare homes sold in those subdivisions with the appraised value assigned in the same neighborhood on Jan. 1, 2007.
For example, if a home appraised at $200,000 actually sold for $190,000 and that pattern is repeated on several homes in the neighborhood, the appraised value would drop $10,000. A reduction of that amount would decrease property taxes by roughly $100. (Annual property taxes are about 1 percent of a home’s value.)
In my opinion, this is the fair thing to do and I commend Washington County for taking the high road. Things would probably work themselves out at the next scheduled reappraisals in 2010, but meanwhile some people would be paying more than their fair share of taxes.
Incidentally, properties in Benton County are currently undergoing their scheduled reappraisals, which will set property values beginning Jan. 1, 2009. We would expect those values to be indicative of current values.
For more information:
http://www.nwanews.com:80/adg/News/230807/
http://www.nwaonline.net/articles/2008/07/10/columns/brenda_blagg/071108blagg.txt
Sunday, March 16, 2008
Bentonville School District Voters Say No
Voters in Bentonville, one of the fastest growing school districts in Arkansas, rejected a proposed millage increase this past week. The district asked voters to approve a 3.99-mill increase in property taxes. Preliminary totals indicate the vote was 2,435 against and 1,699 in favor.
The increase would have made the district’s millage rate 44.09 mills, the seventh highest rate in Arkansas. Owners of a home valued at $200,000 would have been taxed an additional $160 annually if the measure passed.
(For sake of comparison - Springdale’s rate is 38.6, Rogers’ rate is 38.7, and Fayetteville’s is 43.8. However, that may change as all three districts are considering the possibility of passing millage increases to build new schools.)
Bentonville’s millage increase would have permitted a $209 million bond to purchase land, build six schools, make improvements to existing schools, and provide technology upgrades. In addition, some of the money would have gone to operational costs.
The district also planned to restructure existing debt.
In 2002 Bentonville voters approved a $110 million in funding to construct of five schools, athletic facilities and an addition to the high school. Since that vote, growth has been almost unstoppable. The number of students increased by 1,100 in 2005-06 and another 841 this school year.
A failed millage increase this year undoubtedly means the district will have to make some revisions and ask for another increase next year.
For more information:
http://www.nwarktimes.com/adg/News/219315/
http://www.nwarktimes.com/bcdr/News/59440/
The increase would have made the district’s millage rate 44.09 mills, the seventh highest rate in Arkansas. Owners of a home valued at $200,000 would have been taxed an additional $160 annually if the measure passed.
(For sake of comparison - Springdale’s rate is 38.6, Rogers’ rate is 38.7, and Fayetteville’s is 43.8. However, that may change as all three districts are considering the possibility of passing millage increases to build new schools.)
Bentonville’s millage increase would have permitted a $209 million bond to purchase land, build six schools, make improvements to existing schools, and provide technology upgrades. In addition, some of the money would have gone to operational costs.
The district also planned to restructure existing debt.
In 2002 Bentonville voters approved a $110 million in funding to construct of five schools, athletic facilities and an addition to the high school. Since that vote, growth has been almost unstoppable. The number of students increased by 1,100 in 2005-06 and another 841 this school year.
A failed millage increase this year undoubtedly means the district will have to make some revisions and ask for another increase next year.
For more information:
http://www.nwarktimes.com/adg/News/219315/
http://www.nwarktimes.com/bcdr/News/59440/
Friday, January 18, 2008
No Increase in Millage Rates
It appears the cities, counties and school districts that were all talking last fall about the necessity to raise taxes have found ways to keep that from happening – at least for another year.
If you’ll scroll down to the article I posted October 22, 2007, “Will Property Taxes Increase in Northwest Arkansas?” you’ll see that the gist of the matter was that sales tax revenues were down, bridges were falling apart, and school districts needed new schools.
Most of the councils had to work hard to reach consensus about what to cut while still providing necessary services. But the good news is they did their job - just as families are forced to do when income goes down.
The overall picture is now a little brighter. The latest report (October 2007) of Fayetteville’s sales tax receipts shows an increase of 3.8% compared to same month in 2006. The general opinion is the opening of Sam’s Club and Malco’s state-of-the-art movie theater all significantly improved Fayetteville’s revenue stream. However, Fayetteville is the anomaly for that time period. Bentonville’s receipts decreased 8.86%, Rogers down 6.11%, and Springdale down 6.17%.
Washington County Quorum Court says it has depended more on property taxes and less on sales tax receipts for the past several years. When income was greater than expenses, the county squirreled money away so that it now has approximately $15 million in reserve.
City of Rogers ended its fiscal year with a huge reserve. Not only did the city bring in more revenue than projected, it managed to decrease expenditures. Wouldn’t it be great if that feat could be accomplished throughout the area?
Another thing that helped avoid a millage increase is the increased assessed value of property in NW Arkansas. Naturally as values increase, tax revenues increase but Arkansas has laws to keep those increases from getting out of hand. Amendment 59 to the Arkansas Constitution states taxes cannot increase by more than 10% from the previous year, excluding newly discovered or constructed properties.
The bottom line is some entities, such as Washington County, have had to actually decrease the millage rate 0.2 mills from the preceding year. The rate has been set at 6.6 mills.
Millage rates in Washington County can be viewed by going to http://www.co.washington.ar.us/ then click on Information, then scroll down to Millage Rates.
Benton County does not have a list of millage rates on its website but reviewing the faxed copy I received, I think it’s fair to say the majority of entities in Washington County have slightly lower millage rates than those in Benton County.
For more information:
http://www.nwaonline.net/articles/2007/10/29/news/103007szbudget.txt
http://www.nwaonline.net/articles/2007/10/30/news/103107fzcmill.txt
http://www.nwaonline.net/articles/2007/11/18/news/111907bzschoolboardadv.txt
http://www.nwaonline.net/articles/2007/12/28/news/122907fzwaschofinances.txt
http://www.nwarktimes.com/brog/News/55839/
http://www.nwaonline.net/articles/2008/01/02/news/010308fzsalestax.txt
http://www.nwaonline.net/articles/2008/01/03/news/010408fzwaschoqc.txt
http://www.nwarktimes.com/nwat/News/60850/
If you’ll scroll down to the article I posted October 22, 2007, “Will Property Taxes Increase in Northwest Arkansas?” you’ll see that the gist of the matter was that sales tax revenues were down, bridges were falling apart, and school districts needed new schools.
Most of the councils had to work hard to reach consensus about what to cut while still providing necessary services. But the good news is they did their job - just as families are forced to do when income goes down.
The overall picture is now a little brighter. The latest report (October 2007) of Fayetteville’s sales tax receipts shows an increase of 3.8% compared to same month in 2006. The general opinion is the opening of Sam’s Club and Malco’s state-of-the-art movie theater all significantly improved Fayetteville’s revenue stream. However, Fayetteville is the anomaly for that time period. Bentonville’s receipts decreased 8.86%, Rogers down 6.11%, and Springdale down 6.17%.
Washington County Quorum Court says it has depended more on property taxes and less on sales tax receipts for the past several years. When income was greater than expenses, the county squirreled money away so that it now has approximately $15 million in reserve.
City of Rogers ended its fiscal year with a huge reserve. Not only did the city bring in more revenue than projected, it managed to decrease expenditures. Wouldn’t it be great if that feat could be accomplished throughout the area?
Another thing that helped avoid a millage increase is the increased assessed value of property in NW Arkansas. Naturally as values increase, tax revenues increase but Arkansas has laws to keep those increases from getting out of hand. Amendment 59 to the Arkansas Constitution states taxes cannot increase by more than 10% from the previous year, excluding newly discovered or constructed properties.
The bottom line is some entities, such as Washington County, have had to actually decrease the millage rate 0.2 mills from the preceding year. The rate has been set at 6.6 mills.
Millage rates in Washington County can be viewed by going to http://www.co.washington.ar.us/ then click on Information, then scroll down to Millage Rates.
Benton County does not have a list of millage rates on its website but reviewing the faxed copy I received, I think it’s fair to say the majority of entities in Washington County have slightly lower millage rates than those in Benton County.
For more information:
http://www.nwaonline.net/articles/2007/10/29/news/103007szbudget.txt
http://www.nwaonline.net/articles/2007/10/30/news/103107fzcmill.txt
http://www.nwaonline.net/articles/2007/11/18/news/111907bzschoolboardadv.txt
http://www.nwaonline.net/articles/2007/12/28/news/122907fzwaschofinances.txt
http://www.nwarktimes.com/brog/News/55839/
http://www.nwaonline.net/articles/2008/01/02/news/010308fzsalestax.txt
http://www.nwaonline.net/articles/2008/01/03/news/010408fzwaschoqc.txt
http://www.nwarktimes.com/nwat/News/60850/
Monday, October 22, 2007
Will Property Taxes Increase in NW Arkansas?
There’s been a lot of talk lately about the need to increase taxes in our area. The City of Fayetteville, Fayetteville School District, Benton County and Washington County have all mentioned the possibility of higher taxes and the talk seems to be getting louder all the time.
First, let me explain how taxes are determined in Arkansas. One mill is 1/10 of one cent ($.001). The value for tax assessment is 20% of fair market value, which is then multiplied by the effective millage rate. This applies to real estate (homes) and personal property (vehicles, boats and other similar items). A home with a market value of $100,000 would be valued at $20,000 for tax purposes. For example, property within Fayetteville School District and the City of Fayetteville in 2006 was taxed at 50.70 mills. Multiplying $20,000 x .05070 equals a tax of $1014.00.
The City of Fayetteville says it will probably need a 0.9-mill increase to compensate for falling sales tax revenue.
Fayetteville School District says it will need a millage increase of 4 to 10 mills in the not too distant future to build a new high school.
Washington County needs money to replace bridges, one of which has been closed to all traffic and three more bridges need major repairs. This has caused county officials to seriously consider raising the road tax to 3 mills, an increase of 1.9 mills.
Benton County is thinking about a sales tax increase to cover the expenses of moving juvenile detention and court facilities.
As you can see, there are many reasons for possible tax increases and just as many pros and cons. I don’t have the space here to go into all the ramifications, but quality of life has to be given serious consideration. Without street improvements, good schools, adequate police and fire protection, clean air, parks, etc., quality of life decreases.
Higher taxes make most people unhappy. No one ever asks how much more they should pay yet most of us complain about gridlock on the roads or not having immediate response when we need a police officer.
I read recently that Fayetteville City government may cut cost-of-living adjustments for employees in order to lower the tax increase. I have to agree with police and fire fighters – that’s not the best way to balance the budget. City employees deserve to have their wages keep up not only with inflation but also with pay scales in similar cities. We don’t want to lose good, experienced police, fire fighters, and city workers.
Washington County reassessed all real estate in 2007, which resulted in higher appraised values for nearly every parcel. The increased value will be reflected on next year’s tax bills and means higher taxes even if the millage rate is unchanged.
Sam’s Club moved from Springdale to Fayetteville just a few weeks ago. Naturally, that means more sales tax revenue for the city. Malco Movie Theater just opened its brand new, state-of-the-art, digital 12-screen theater in Fayetteville, which is also expected to bring in more sales taxes. But these two new sales tax sources will not make up for the reduced level of revenue from sales taxes in Fayetteville.
Another factor to keep in mind is that Fayetteville is the lowest taxing city of any of the major towns in NW Arkansas, according to Mayor Dan Coody. And a modest increase in the millage now may prevent a larger increase in the future.
Some government entities have money in reserve accounts. I know we have to have money in the “rainy-day fund,” but dark clouds are already gathering.
The needs are numerous, expensive, and easy to justify. Maybe we need to face reality and dig deeper into our wallets.
For more information:
http://nwaonline.net/articles/2007/10/14/news/101507fzmillage.txt
http://www.nwaonline.net/articles/2007/10/11/columns/brenda_blagg/101207blagg.txt
http://www.nwarktimes.com/nwat/News/58291/
http://www.nwarktimes.com/nwat/News/58263/
http://www.nwarktimes.com/nwat/Editorial/58200/
First, let me explain how taxes are determined in Arkansas. One mill is 1/10 of one cent ($.001). The value for tax assessment is 20% of fair market value, which is then multiplied by the effective millage rate. This applies to real estate (homes) and personal property (vehicles, boats and other similar items). A home with a market value of $100,000 would be valued at $20,000 for tax purposes. For example, property within Fayetteville School District and the City of Fayetteville in 2006 was taxed at 50.70 mills. Multiplying $20,000 x .05070 equals a tax of $1014.00.
The City of Fayetteville says it will probably need a 0.9-mill increase to compensate for falling sales tax revenue.
Fayetteville School District says it will need a millage increase of 4 to 10 mills in the not too distant future to build a new high school.
Washington County needs money to replace bridges, one of which has been closed to all traffic and three more bridges need major repairs. This has caused county officials to seriously consider raising the road tax to 3 mills, an increase of 1.9 mills.
Benton County is thinking about a sales tax increase to cover the expenses of moving juvenile detention and court facilities.
As you can see, there are many reasons for possible tax increases and just as many pros and cons. I don’t have the space here to go into all the ramifications, but quality of life has to be given serious consideration. Without street improvements, good schools, adequate police and fire protection, clean air, parks, etc., quality of life decreases.
Higher taxes make most people unhappy. No one ever asks how much more they should pay yet most of us complain about gridlock on the roads or not having immediate response when we need a police officer.
I read recently that Fayetteville City government may cut cost-of-living adjustments for employees in order to lower the tax increase. I have to agree with police and fire fighters – that’s not the best way to balance the budget. City employees deserve to have their wages keep up not only with inflation but also with pay scales in similar cities. We don’t want to lose good, experienced police, fire fighters, and city workers.
Washington County reassessed all real estate in 2007, which resulted in higher appraised values for nearly every parcel. The increased value will be reflected on next year’s tax bills and means higher taxes even if the millage rate is unchanged.
Sam’s Club moved from Springdale to Fayetteville just a few weeks ago. Naturally, that means more sales tax revenue for the city. Malco Movie Theater just opened its brand new, state-of-the-art, digital 12-screen theater in Fayetteville, which is also expected to bring in more sales taxes. But these two new sales tax sources will not make up for the reduced level of revenue from sales taxes in Fayetteville.
Another factor to keep in mind is that Fayetteville is the lowest taxing city of any of the major towns in NW Arkansas, according to Mayor Dan Coody. And a modest increase in the millage now may prevent a larger increase in the future.
Some government entities have money in reserve accounts. I know we have to have money in the “rainy-day fund,” but dark clouds are already gathering.
The needs are numerous, expensive, and easy to justify. Maybe we need to face reality and dig deeper into our wallets.
For more information:
http://nwaonline.net/articles/2007/10/14/news/101507fzmillage.txt
http://www.nwaonline.net/articles/2007/10/11/columns/brenda_blagg/101207blagg.txt
http://www.nwarktimes.com/nwat/News/58291/
http://www.nwarktimes.com/nwat/News/58263/
http://www.nwarktimes.com/nwat/Editorial/58200/
Saturday, October 06, 2007
Property taxes due this coming Wednesday
Just thought I would post a reminder that property and personal property taxes in Arkansas are due this Wednesday. If you don't pay on time, there will be a 10% late fee.
Many home owners pay their taxes as part of their monthly mortgage payment. The annual tax is divided into 12 and the home owner pays 1/12 each month. Then when tax bills are sent out, the bank pays the property tax, usually in April or May. These folks can rest easy, since their property taxes have already been paid.
But if your bank is not paying your property taxes as part of your mortgage and you didn't pay them last spring when the bills were sent out, then you only have a few more days to pay them. There are also those pesky personal property taxes. Those are also due now, if you haven't already paid them when you got your bill last spring.
One good thing if you don't want to stand in line at the county courthouse in Washington or Benton County--you can now pay them on line with a credit card or have them directly deducted from your checking account. But if you want to pay from your checking account in Washington County, make sure you have your tax bill handy, since you will need it for security purposes. There is also an extra charge in Washington County to pay on line. I'm not sure about Benton County, since I don't live there.
The web addresses for the two county websites are:
http://www.co.washington.ar.us
http://www.co.benton.ar.us
Many home owners pay their taxes as part of their monthly mortgage payment. The annual tax is divided into 12 and the home owner pays 1/12 each month. Then when tax bills are sent out, the bank pays the property tax, usually in April or May. These folks can rest easy, since their property taxes have already been paid.
But if your bank is not paying your property taxes as part of your mortgage and you didn't pay them last spring when the bills were sent out, then you only have a few more days to pay them. There are also those pesky personal property taxes. Those are also due now, if you haven't already paid them when you got your bill last spring.
One good thing if you don't want to stand in line at the county courthouse in Washington or Benton County--you can now pay them on line with a credit card or have them directly deducted from your checking account. But if you want to pay from your checking account in Washington County, make sure you have your tax bill handy, since you will need it for security purposes. There is also an extra charge in Washington County to pay on line. I'm not sure about Benton County, since I don't live there.
The web addresses for the two county websites are:
http://www.co.washington.ar.us
http://www.co.benton.ar.us
Tuesday, July 24, 2007
New Washington County Property Appraisals
The Washington County Assessor's Office determines the value of property every three years.
Most owners have by now received Notice of Change in Assessment letters and the majority of those letters indicate increased values, much like what occurred when reassessments were done in 2004. At that time, assessed values increased significantly over previous assessments, as they were brought more in line with market value at a time when the market was increasing at double-digit rates. Previously assessed values were much less than market value.
Here’s how it works. First the 2007 Appraised Value is determined. That amount is multiplied by 20% to determine 2007 Full Assessed. Then the 2007 Full Assessed is multiplied by the millage rate in effect where the property is located.
People usually get upset anytime they see their taxes increase and this year is no different. One of the most common complaints I hear is that property values have gone down – not up. But the important thing to remember is that the reappraisal compares property values in 2004 to 2007. I think it’s fair to say most property values in Washington County have increased in the past three years.
On the other hand, some of the new appraisals are clearly out of line, but it is an individual situation. For example, I have a client who purchased a new home last August for $165,000 and whose reassessment says it is now worth $175,000. According to market data I have analyzed (check my first quarter market report in the archives of this blog), prices decreased in the last quarter of 2006 in Washington County by about 14%. Although they began rising again in the first quarter of 2007, if my clients where to market their home now, they would be hard pressed to even get what they paid for it a year ago.
Here are two important statements which I took directly from the Notice of Change in Assessment:
“Assessments on properties serving as the principal place of residence for any taxpayer who is disabled or who is 65 years of age or older prior to Jan. 1, 2007, shall be assessed at a level no greater than the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed.”
“Assessments on properties serving as the principal place of residence for all other taxpayers shall be limited to a 5% increase over the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed. The 5% increase will occur yearly until the Full Assessed Value is reached.”
This limit extends so long as the property is not sold. The full appraised value kicks in once the property is sold to a new owner.
If you feel your property is unfairly assessed, call 479-587-1130 to speak with an appraiser at Arkansas CAMA Technology, Inc., the firm that performed the appraisals for Washington County.
If you wish to schedule a formal hearing with County Equalization Board, call the County Clerk’s office at 479-444-1711 no later than August 20, 2007.
Hearings will begin August 1, 2007 and if required, will continue through October 1, 2007.
One piece of good news – With 2007 taxes, which are due in October 2008, homeowners will receive up to $350.00 property tax credit on the property serving as their principal residence. This is an increase of $50 over 2006 taxes, which are due October 2007. If you have not previously applied for this credit, do so by calling the Washington County Assessor at 479-444-1500.
For more information:
http://www.nwaonline.net/articles/2007/07/02/news/070307fzwaschoreappraise.txt
Most owners have by now received Notice of Change in Assessment letters and the majority of those letters indicate increased values, much like what occurred when reassessments were done in 2004. At that time, assessed values increased significantly over previous assessments, as they were brought more in line with market value at a time when the market was increasing at double-digit rates. Previously assessed values were much less than market value.
Here’s how it works. First the 2007 Appraised Value is determined. That amount is multiplied by 20% to determine 2007 Full Assessed. Then the 2007 Full Assessed is multiplied by the millage rate in effect where the property is located.
People usually get upset anytime they see their taxes increase and this year is no different. One of the most common complaints I hear is that property values have gone down – not up. But the important thing to remember is that the reappraisal compares property values in 2004 to 2007. I think it’s fair to say most property values in Washington County have increased in the past three years.
On the other hand, some of the new appraisals are clearly out of line, but it is an individual situation. For example, I have a client who purchased a new home last August for $165,000 and whose reassessment says it is now worth $175,000. According to market data I have analyzed (check my first quarter market report in the archives of this blog), prices decreased in the last quarter of 2006 in Washington County by about 14%. Although they began rising again in the first quarter of 2007, if my clients where to market their home now, they would be hard pressed to even get what they paid for it a year ago.
Here are two important statements which I took directly from the Notice of Change in Assessment:
“Assessments on properties serving as the principal place of residence for any taxpayer who is disabled or who is 65 years of age or older prior to Jan. 1, 2007, shall be assessed at a level no greater than the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed.”
“Assessments on properties serving as the principal place of residence for all other taxpayers shall be limited to a 5% increase over the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed. The 5% increase will occur yearly until the Full Assessed Value is reached.”
This limit extends so long as the property is not sold. The full appraised value kicks in once the property is sold to a new owner.
If you feel your property is unfairly assessed, call 479-587-1130 to speak with an appraiser at Arkansas CAMA Technology, Inc., the firm that performed the appraisals for Washington County.
If you wish to schedule a formal hearing with County Equalization Board, call the County Clerk’s office at 479-444-1711 no later than August 20, 2007.
Hearings will begin August 1, 2007 and if required, will continue through October 1, 2007.
One piece of good news – With 2007 taxes, which are due in October 2008, homeowners will receive up to $350.00 property tax credit on the property serving as their principal residence. This is an increase of $50 over 2006 taxes, which are due October 2007. If you have not previously applied for this credit, do so by calling the Washington County Assessor at 479-444-1500.
For more information:
http://www.nwaonline.net/articles/2007/07/02/news/070307fzwaschoreappraise.txt
Monday, February 26, 2007
More Tax Cuts for Arkansans
In addition to the state’s largest tax cut in history (reducing the sales tax on groceries by 50%) more good news arrived this week on a variety of tax cuts. These measures are designed to boost the economy, make Arkansas more attractive to business and retirees who carefully study tax implications before moving to a new state, and help many of our most vulnerable residents.
Increase in Homestead Tax Credit Becomes Law
An increase of $50 in the homestead tax credit was signed into law. Currently, homeowners in Arkansas are eligible for a credit of up to $300 on taxes for their principal residence. The new maximum credit of $350 will become effective with the 2007 assessment year and will appear on property tax bills in 2008.
There are approximately 696,000 homesteads in Arkansas and it is expected that about 538,000 homesteads will we benefit from some or all of the additional $50 tax credit.
The homestead tax credits are financed by a one-half percent sales tax collected by the state, which, in turn, reimburses the counties for the property taxes they did not collect because of the tax credits. According to the state finance department, a $60 million balance was on hand at the end of last year. Governor Beebe has stated, “We were able to determine that we could conservatively and reasonably [increase the credit] and still be sound going into the future.”
Income Tax Cuts for Working Poor Move Closer
It looks like state income tax cuts for low-income people are on the horizon. The House tax committee has endorsed a bill that would exempt approximately 62,000 Arkansans from paying state income tax.
In its current form, the bill would eliminate the following groups from state income tax:
Single people with an annual gross income tax (AGI) of less than $10,200;
Married couples filing jointly with less than two dependents and AGI less than $17,200;
Married couples filing jointly with two or more dependents and AGI less than $20,700;
Head of Household filers with AGI less than $13,700.
Arkansans with income above the federal poverty level but less than 33% above it would receive tax credits to partially offset state income tax. The state finance department estimates 89,000 taxpayers would be eligible for these credits.
This is a step in the right direction. Just imagine a family of four (or more) trying to make ends meet on less than $20,700 a year. If this bill becomes law, it would provide tax relief for people in low-paying jobs and cut the workload at the Department of Revenue at the same time.
A Bill Advances to Equalize Taxes on Military Officers and Enlisted Personnel
Under existing law, enlisted military personnel do not pay state income tax on the first $9,000 of pay. However, officers are taxed on all military pay over $6,000.
The $3,000 difference seems strange to me and apparently to Rep. Sandra Prater, D-Jacksonville, as well. She has introduced a bill that would make the first $9,000 of military pay exempt from state income tax, regardless of rank. The bill passed the House and Senate and has been sent to the Governor.
Reducing Sales Taxes on Utilities Paid by Manufacturers
Bills to reduce the sales tax that manufacturers pay on natural gas and electricity seem to be sailing through the legislature. If signed into law as expected, the sales tax paid on utilities used by manufacturers would decrease from 6% to 4.5% on July 1, 2007. Another scheduled decrease would drop the tax to 4% on July 1, 2008.
State officials say the decreases will reduce state revenue by $20.2 million next fiscal year and $30.5 million the next year.
Perhaps your first reaction to this news might be “What about the taxes I pay on utilities? I’d like to pay less, too.” But the situation bears a closer look.
Arkansas needs to retain the industry it has while at the same time it must recruit more economic development to the state. The 6% sales tax on utilities puts Arkansas at a disadvantage. Most of the neighboring states charge manufacturers lower or even zero sales tax on utilities.
The Arkansas Chamber of Commerce is a strong advocate of this tax cut. If it passes, Arkansas will be in a more favorable position to recruit new employers. Arkansas is still trying to land a huge Toyota plant and there are other possibilities on the horizon.
I say go for it - I’m tired of hearing about the ones that get away, especially now with the recent loss of manufacturing jobs in this area.
For more information on these subjects:
http://www.nwanews.com/adg/National/182567/
http://www.nwaonline.net/articles/2007/02/22/topics/assembly07/022207lrlegpropertytax.txt
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=182003
http://www.nwanews.com/story.php?paper=adg§ion=National&storyid=182089
Increase in Homestead Tax Credit Becomes Law
An increase of $50 in the homestead tax credit was signed into law. Currently, homeowners in Arkansas are eligible for a credit of up to $300 on taxes for their principal residence. The new maximum credit of $350 will become effective with the 2007 assessment year and will appear on property tax bills in 2008.
There are approximately 696,000 homesteads in Arkansas and it is expected that about 538,000 homesteads will we benefit from some or all of the additional $50 tax credit.
The homestead tax credits are financed by a one-half percent sales tax collected by the state, which, in turn, reimburses the counties for the property taxes they did not collect because of the tax credits. According to the state finance department, a $60 million balance was on hand at the end of last year. Governor Beebe has stated, “We were able to determine that we could conservatively and reasonably [increase the credit] and still be sound going into the future.”
Income Tax Cuts for Working Poor Move Closer
It looks like state income tax cuts for low-income people are on the horizon. The House tax committee has endorsed a bill that would exempt approximately 62,000 Arkansans from paying state income tax.
In its current form, the bill would eliminate the following groups from state income tax:
Single people with an annual gross income tax (AGI) of less than $10,200;
Married couples filing jointly with less than two dependents and AGI less than $17,200;
Married couples filing jointly with two or more dependents and AGI less than $20,700;
Head of Household filers with AGI less than $13,700.
Arkansans with income above the federal poverty level but less than 33% above it would receive tax credits to partially offset state income tax. The state finance department estimates 89,000 taxpayers would be eligible for these credits.
This is a step in the right direction. Just imagine a family of four (or more) trying to make ends meet on less than $20,700 a year. If this bill becomes law, it would provide tax relief for people in low-paying jobs and cut the workload at the Department of Revenue at the same time.
A Bill Advances to Equalize Taxes on Military Officers and Enlisted Personnel
Under existing law, enlisted military personnel do not pay state income tax on the first $9,000 of pay. However, officers are taxed on all military pay over $6,000.
The $3,000 difference seems strange to me and apparently to Rep. Sandra Prater, D-Jacksonville, as well. She has introduced a bill that would make the first $9,000 of military pay exempt from state income tax, regardless of rank. The bill passed the House and Senate and has been sent to the Governor.
Reducing Sales Taxes on Utilities Paid by Manufacturers
Bills to reduce the sales tax that manufacturers pay on natural gas and electricity seem to be sailing through the legislature. If signed into law as expected, the sales tax paid on utilities used by manufacturers would decrease from 6% to 4.5% on July 1, 2007. Another scheduled decrease would drop the tax to 4% on July 1, 2008.
State officials say the decreases will reduce state revenue by $20.2 million next fiscal year and $30.5 million the next year.
Perhaps your first reaction to this news might be “What about the taxes I pay on utilities? I’d like to pay less, too.” But the situation bears a closer look.
Arkansas needs to retain the industry it has while at the same time it must recruit more economic development to the state. The 6% sales tax on utilities puts Arkansas at a disadvantage. Most of the neighboring states charge manufacturers lower or even zero sales tax on utilities.
The Arkansas Chamber of Commerce is a strong advocate of this tax cut. If it passes, Arkansas will be in a more favorable position to recruit new employers. Arkansas is still trying to land a huge Toyota plant and there are other possibilities on the horizon.
I say go for it - I’m tired of hearing about the ones that get away, especially now with the recent loss of manufacturing jobs in this area.
For more information on these subjects:
http://www.nwanews.com/adg/National/182567/
http://www.nwaonline.net/articles/2007/02/22/topics/assembly07/022207lrlegpropertytax.txt
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=182003
http://www.nwanews.com/story.php?paper=adg§ion=National&storyid=182089
Wednesday, June 14, 2006
Baby Boomers Dominate 2nd Home Market
When I hear the phrase “baby boomers,” a picture forms in my mind’s eye – a picture of large numbers of well-educated people who are nearing retirement age. The number of people born between 1946 and 1964 now comprises the largest generation in U.S. history. They have affected everything from women’s lib and civil rights to glass ceilings and just about everything in between.
I am a baby boomer and a Realtor® so I was not surprised when I recently became aware of some studies by NAR as to the effect baby boomers are having on the housing market, not only nationally but also here in NW Arkansas.
A recent study by National Association of Realtors® (NAR) shows that 80% of baby boomers own their primary residence. The overall rate of home ownership is the United States is only 69%. According to the U.S. Census Bureau, there are 74.6 million owner-occupied homes. That means boomers own almost 60 million of them.
In addition, there are 6.8 million vacation/seasonal/second homes in the U.S. and boomers own 57% of them. Many boomers own more than one. Bella Vista anyone?
Not all boomers plan to make their vacation home their primary residence when they retire, but for those who do, the income tax advantages are very generous. Internal Revenue Service rules state that married homeowners who have lived in their primary residence for at least 2 out of the 5 years ending on the date of sale can exclude up to $500,000 of gain. Unmarried taxpayers can exclude up to $250,000 of gain.
After selling their primary residence, if they then move into their vacation home and make that their primary residence, the same rules apply: live in it for at least 2 out of the 5 years ending on the date of sale and another sizable capital gain can be excluded from taxable income. There is no limit on the number of times this provision of the tax code can be used.
Interest and property taxes on a second home are deductible each year. Add to that the advantage of tax-free capital gains and it’s easy to understand why many boomers will move from home to home. Having such favorable tax advantages can help build a comfortable retirement.
According to National Association of Realtors® study,”Leisure activities of interest to vacation-home owners include beach, lake or water sports, 57 percent; boating, 38 percent; hunting or fishing, 32 percent; golf, 21 percent; biking, hiking or horseback riding, 20 percent; ski or winter recreation, 17 percent; and tennis, 9 percent.” It’s no wonder Northwest Arkansas is so popular!
Boomers are in the midst of their highest-earning years. They realize the benefits property ownership provides. Not only do boomers understand the value of owning property, they understand the value of diversifying their assets.
More than half of all rental property in the United States is currently owned by boomers. Some own only one rental, but a considerable number own five or more properties. And NW Arkansas, despite the recent rise in multi-family prices, still provides good opportunities for investment.
Boomers have also branched out to ownership of commercial property and undeveloped land.
If I can help you find property that may help with your overall plans for home ownership now or in your retirement, please call me. I can help you find investment properties or land as well as a nice retirement home. And if you want to purchase a second home elsewhere, I communicate regularly with agents from all over the country who may be able to help.
For more information:
http://www.irs.gov/publications/p523/ar02.html#d0e1931
http://www.realtor.org/PublicAffairsWeb.nsf/Pages/BabyBoomerStudy06?OpenDocument
http://www.realtor.org/PublicAffairsWeb.nsf/Pages/2ndHomeSurvey06?OpenDocument
I am a baby boomer and a Realtor® so I was not surprised when I recently became aware of some studies by NAR as to the effect baby boomers are having on the housing market, not only nationally but also here in NW Arkansas.
A recent study by National Association of Realtors® (NAR) shows that 80% of baby boomers own their primary residence. The overall rate of home ownership is the United States is only 69%. According to the U.S. Census Bureau, there are 74.6 million owner-occupied homes. That means boomers own almost 60 million of them.
In addition, there are 6.8 million vacation/seasonal/second homes in the U.S. and boomers own 57% of them. Many boomers own more than one. Bella Vista anyone?
Not all boomers plan to make their vacation home their primary residence when they retire, but for those who do, the income tax advantages are very generous. Internal Revenue Service rules state that married homeowners who have lived in their primary residence for at least 2 out of the 5 years ending on the date of sale can exclude up to $500,000 of gain. Unmarried taxpayers can exclude up to $250,000 of gain.
After selling their primary residence, if they then move into their vacation home and make that their primary residence, the same rules apply: live in it for at least 2 out of the 5 years ending on the date of sale and another sizable capital gain can be excluded from taxable income. There is no limit on the number of times this provision of the tax code can be used.
Interest and property taxes on a second home are deductible each year. Add to that the advantage of tax-free capital gains and it’s easy to understand why many boomers will move from home to home. Having such favorable tax advantages can help build a comfortable retirement.
According to National Association of Realtors® study,”Leisure activities of interest to vacation-home owners include beach, lake or water sports, 57 percent; boating, 38 percent; hunting or fishing, 32 percent; golf, 21 percent; biking, hiking or horseback riding, 20 percent; ski or winter recreation, 17 percent; and tennis, 9 percent.” It’s no wonder Northwest Arkansas is so popular!
Boomers are in the midst of their highest-earning years. They realize the benefits property ownership provides. Not only do boomers understand the value of owning property, they understand the value of diversifying their assets.
More than half of all rental property in the United States is currently owned by boomers. Some own only one rental, but a considerable number own five or more properties. And NW Arkansas, despite the recent rise in multi-family prices, still provides good opportunities for investment.
Boomers have also branched out to ownership of commercial property and undeveloped land.
If I can help you find property that may help with your overall plans for home ownership now or in your retirement, please call me. I can help you find investment properties or land as well as a nice retirement home. And if you want to purchase a second home elsewhere, I communicate regularly with agents from all over the country who may be able to help.
For more information:
http://www.irs.gov/publications/p523/ar02.html#d0e1931
http://www.realtor.org/PublicAffairsWeb.nsf/Pages/BabyBoomerStudy06?OpenDocument
http://www.realtor.org/PublicAffairsWeb.nsf/Pages/2ndHomeSurvey06?OpenDocument
Wednesday, May 03, 2006
Will Your Taxes Be Higher or Lower in Arkansas?
Everyone asks me about taxes here in NW Arkansas compared to where they are moving from. It’s a hard question to answer, since it depends on where the person is moving from, and it depends on the situation of the person moving to NW Arkansas. I recently came across an article on the Internet (see below) that said Arkansas ranked in the middle of most to least tax-friendly states. According to this article, an Arkansan’s tax burden is 10.3% of his/her per capita income, which makes Arkansas #27 on the list.
Like most statistics, this list may or may not mean much to any one individual. It does take into consideration property tax, state sales and luxury taxes, state income taxes, fuel taxes, and more. But it does not consider many other types of taxes, such as city and local sales tax, excise tax, and estate and inheritance taxes. Nor has it considered tax credits you may qualify for or the type of income you have.
Last but not least, by its very nature it cannot consider those things that are most important to you and your family. Are you moving to Arkansas to take on a new position? Are you recently retired and looking for an agreeable climate where you can live without treacherous snow and ice for several months of the year? Do you need to move closer to family so you can help them or they can help you? How important is the cultural scene to you? Perhaps you’re more interested in beautiful scenery and good, clean air to breath than Broadway shows. These are all personal decisions that would hold more weight in a decision about where you want to live. Tax-friendliness of a state is much further down on the list for most people.
Different types of income have different tax consequences. Arkansas does not tax Social Security benefits, VA benefits, Workers’ Compensation, Unemployment Compensation, or Railroad Retirement benefits. Arkansas does not tax the first $9,000 of U.S. Military Enlisted compensation. The first $6,000 of U.S. Military Officer’s compensation is also exempt from state income tax.
The first $6,000 received from an employer-sponsored retirement plan and/or from an IRA distribution is exempt from Arkansas income tax. Arkansas also allows a direct credit of $21 against state income tax for everyone. If you are over 65, the credit is doubled. When the above factors are executed, many retirees find they have zero (0) state income tax to pay in Arkansas.
In every state, property taxes will vary according to the city, county, school district, library district, fire district, etc., where the property is located. The rule of thumb that we (realtors) use in Washington and Benton Counties is that property taxes will be slightly less than 1% of the purchase price, less the $300 Homestead Tax credit. This will vary according to municipality (i.e. their mil rate), and homes outside of city limits will have a mil rate less than those in a town.
According to Kiplinger’s Magazine, Arkansans pay very little property tax, $321 per capita. Only residents of Kentucky at $286, New Mexico at $283 and Alabama at $210 pay less. It’s not surprising that residents of two states that do not levy income taxes on earned income do pay considerably higher property taxes. New Jersey residents pay $1,591 per capita, New Hampshire residents pay $1,555 per capita and Texans pay $852.
Homeowners in Arkansas have who are at least 65 years age qualify to have their appraised evaluation capped. This provision helps senior citizens remain in their homes instead of being taxed out of them as evaluations increase. In addition, a property tax credit of up to $300 per year is available on a person’s principal place of residence, regardless of age.
And still another good point to note about Arkansas: it is heir-friendly. There is no estate tax in Arkansas.
The bottom line is that all political entities need revenue to provide services and that money must come from the people. All in all, I think Arkansas is very tax friendly compared to some other areas of the country.
For more information:
http://money.cnn.com/2006/04/10/pf/taxes/taxfriendly_states_2006/index.htm
http://www.bankrate.com/brm/itax/news/20051107a1.asp?caret=21
http://www.bankrate.com/brm/itax/state/state_tax_home.asp
http://www.bankrate.com/brm/itax/news/20051107b1.asp
http://www.retirementliving.com/RLtaxes.html
http://www.keepmedia.com/pubs/KiplingersRetirementReport/2002/07/01/129139?extID=10032&oliID=213
http://www.keepmedia.com/pubs/KiplingersRetirementReport/2001/03/01/128658?ba=a&bi=0&bp=97
http://www.taxadmin.org/fta/rate/tax_stru.html
http://www.forbes.com/free_forbes/2004/0315/171sidebar.html
Like most statistics, this list may or may not mean much to any one individual. It does take into consideration property tax, state sales and luxury taxes, state income taxes, fuel taxes, and more. But it does not consider many other types of taxes, such as city and local sales tax, excise tax, and estate and inheritance taxes. Nor has it considered tax credits you may qualify for or the type of income you have.
Last but not least, by its very nature it cannot consider those things that are most important to you and your family. Are you moving to Arkansas to take on a new position? Are you recently retired and looking for an agreeable climate where you can live without treacherous snow and ice for several months of the year? Do you need to move closer to family so you can help them or they can help you? How important is the cultural scene to you? Perhaps you’re more interested in beautiful scenery and good, clean air to breath than Broadway shows. These are all personal decisions that would hold more weight in a decision about where you want to live. Tax-friendliness of a state is much further down on the list for most people.
Different types of income have different tax consequences. Arkansas does not tax Social Security benefits, VA benefits, Workers’ Compensation, Unemployment Compensation, or Railroad Retirement benefits. Arkansas does not tax the first $9,000 of U.S. Military Enlisted compensation. The first $6,000 of U.S. Military Officer’s compensation is also exempt from state income tax.
The first $6,000 received from an employer-sponsored retirement plan and/or from an IRA distribution is exempt from Arkansas income tax. Arkansas also allows a direct credit of $21 against state income tax for everyone. If you are over 65, the credit is doubled. When the above factors are executed, many retirees find they have zero (0) state income tax to pay in Arkansas.
In every state, property taxes will vary according to the city, county, school district, library district, fire district, etc., where the property is located. The rule of thumb that we (realtors) use in Washington and Benton Counties is that property taxes will be slightly less than 1% of the purchase price, less the $300 Homestead Tax credit. This will vary according to municipality (i.e. their mil rate), and homes outside of city limits will have a mil rate less than those in a town.
According to Kiplinger’s Magazine, Arkansans pay very little property tax, $321 per capita. Only residents of Kentucky at $286, New Mexico at $283 and Alabama at $210 pay less. It’s not surprising that residents of two states that do not levy income taxes on earned income do pay considerably higher property taxes. New Jersey residents pay $1,591 per capita, New Hampshire residents pay $1,555 per capita and Texans pay $852.
Homeowners in Arkansas have who are at least 65 years age qualify to have their appraised evaluation capped. This provision helps senior citizens remain in their homes instead of being taxed out of them as evaluations increase. In addition, a property tax credit of up to $300 per year is available on a person’s principal place of residence, regardless of age.
And still another good point to note about Arkansas: it is heir-friendly. There is no estate tax in Arkansas.
The bottom line is that all political entities need revenue to provide services and that money must come from the people. All in all, I think Arkansas is very tax friendly compared to some other areas of the country.
For more information:
Washington and Benton County Property Millage Rates:
http://www.co.benton.ar.us/Administration/BCCollect/index.htm (scroll down and click on Current Millage Rates)
http://www.co.washington.ar.us (click on Information and then on Millage rates)
http://money.cnn.com/2006/04/10/pf/taxes/taxfriendly_states_2006/index.htm
http://www.bankrate.com/brm/itax/news/20051107a1.asp?caret=21
http://www.bankrate.com/brm/itax/state/state_tax_home.asp
http://www.bankrate.com/brm/itax/news/20051107b1.asp
http://www.retirementliving.com/RLtaxes.html
http://www.keepmedia.com/pubs/KiplingersRetirementReport/2002/07/01/129139?extID=10032&oliID=213
http://www.keepmedia.com/pubs/KiplingersRetirementReport/2001/03/01/128658?ba=a&bi=0&bp=97
http://www.taxadmin.org/fta/rate/tax_stru.html
http://www.forbes.com/free_forbes/2004/0315/171sidebar.html
Wednesday, March 29, 2006
Property tax relief for Arkansas homeowners
The words tax and relief aren’t often found in the same sentence but Arkansas has some provisions to help relieve the property tax burden on homeowners. With income taxes on most people’s minds this time of year and property tax bills now arriving in mail boxes, I thought this would be a good time to mention some of these benefits.
The technical name is Amendment 79 but it's frequently referred to as the "homestead exemption." The benefits are easy to understand and easy to get.
A credit of $300 per year is available to lower property taxes on a person’s principal place of residence. Notify your county assessor once and the credit will be applied to your tax bill every year as long as the property remains your principal residence. There is a short form which must be filled out (see below).
Another provision allows homeowners age 65 and up to have their appraised evaluation capped. The result is that taxes on your home will never increase due to a reappraisal. But bear in mind, a major improvement to your property can increase the appraised value and a change in the millage rate will also affect the amount of tax you must pay. To have your evaluation capped, you must be age 65 or older on January 1 of the year you apply, complete a simple form and send it with proof of age to your county assessor.
Homeowners who are disabled as defined by the Social Security Administration also qualify for the cap on appraised value regardless of age.
For more details, go to http://www.arkansas.gov/acd/faqs.html.
The Washington County assessor has an explanation of Amendment 79 at http://www.co.washington.ar.us/Assessor/Am79.htm. This is a one-page website and if you read the paragraph above the assessors address, you’ll find a link to the claim form or go directly to http://www.co.washington.ar.us/Assessor/forms/hswbform.pdf.
If your home is located in Benton County, you can access the form at http://www.co.benton.ar.us/Administration/BCAssessor/HomesteadApp.pdf.
The technical name is Amendment 79 but it's frequently referred to as the "homestead exemption." The benefits are easy to understand and easy to get.
A credit of $300 per year is available to lower property taxes on a person’s principal place of residence. Notify your county assessor once and the credit will be applied to your tax bill every year as long as the property remains your principal residence. There is a short form which must be filled out (see below).
Another provision allows homeowners age 65 and up to have their appraised evaluation capped. The result is that taxes on your home will never increase due to a reappraisal. But bear in mind, a major improvement to your property can increase the appraised value and a change in the millage rate will also affect the amount of tax you must pay. To have your evaluation capped, you must be age 65 or older on January 1 of the year you apply, complete a simple form and send it with proof of age to your county assessor.
Homeowners who are disabled as defined by the Social Security Administration also qualify for the cap on appraised value regardless of age.
For more details, go to http://www.arkansas.gov/acd/faqs.html.
The Washington County assessor has an explanation of Amendment 79 at http://www.co.washington.ar.us/Assessor/Am79.htm. This is a one-page website and if you read the paragraph above the assessors address, you’ll find a link to the claim form or go directly to http://www.co.washington.ar.us/Assessor/forms/hswbform.pdf.
If your home is located in Benton County, you can access the form at http://www.co.benton.ar.us/Administration/BCAssessor/HomesteadApp.pdf.
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