EDITOR’S NOTE — This story corrects information in the article below.
A story in the Sunday Peninsula Daily News, “County hears last of property tax appeals,” incorrectly said the Assessor’s Office increased the value of her Port Angeles home when it actually decreased the value.
The story also included the incorrect purchase price and 2009 taxes that Reynolds paid on the parcel.
The story was about tax appeals that were filed on the tax assessor’s office’s 2009 assessments in Port Townsend for payment of 2010 taxes.
The equalization board heard Reynolds’ appeal Friday and will hear two final appeals on Dec. 2 and then will rule on their validity.
Reynolds bought the Adams Street house in 2007 for $427,500. She paid $2,145 in property taxes in 2009.
The Assessor’s Office decreased the value to $363,470 in its assessment of Port Townsend properties
“Obviously, the Assessor Office recognized the values have dropped from Jan. 1, 2007, and Jan. 1, 2009, which is why it’s 15 percent below what she paid by for it by Jan. 1, 2009,” Westerman said Monday.
The Board of Equalization, comprised of William Marlow of Port Hadlock, Dave Garing of Marrowstone Island and Richard Broders of Discovery Bay, heard Reynolds’ appeal on Friday and will issue its ruling on Dec. 2.
“We appealed our new property tax assessment because it was based on the sales price in 2007 (at the height of the real estate market), thus creating an increase of 36 percent, which seemed extreme,”
Reynolds said in an e-mail.
“Most people in our area had assessment increases in the 10 percent range, and we felt it was unfair to impose dramatic jump increases on in the property taxes of those folks who had who had bought homes in the last four years, and not have similar increases affect all homes in the neighborhoods.”
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EDITOR’S NOTE: This is the first of a two-part series on property assessments and property taxes.
PORT TOWNSEND – Melanie C. Reynolds doesn’t mind paying property taxes, but she feels penalized for buying a 1,200-square-foot rambler on Adams Street two years ago for $319,000 — and seeing the taxable fair-market value increase by $44,700 to $363,700 since then.
So Reynolds appealed the determination to the three-person Jefferson County Board of Equalization on Friday.
“We were feeling we were being punished by moving to Port Townsend,” Reynolds said last week.
Reynolds was among 105 property owners who filed appeals after receiving tax assessment notices for 6,000 parcels between July 1 and July 31. Five of those appeals have been won by the appellants, with about a dozen left to be heard.
The value of Port Townsend increased by $165 million, or an average of $27,500 per parcel, between 2005, when the properties were last assessed, and 2009.
The Board of Equalization will decide on Reynolds’ appeal and hear the last of the tax-assessment challenges at 10 a.m. Dec. 2 in the first-floor conference room of the Jefferson County courthouse.
The hearing is open to the public, but the board will decide behind closed doors and mail their decision to the appellants.
Appointed by the county commissioners, the board is comprised of William Marlow of Port Hadlock, Dave Garing of Marrowstone Island and Richard Broders of Discovery Bay.
On the other end of the spectrum, Donna Abbott, 65, and her husband, Charles, 79, are more than happy with their tax assessment.
Their senior exemption knocks more than half of the taxable value off of their 124-year-old Victorian home, shoving it down to a palatable $168,985.
“Thank God we have that exemption,” Donna Abbott said last week.
The 2009 assessments, which will determine 2010 property taxes, showed property values within the city limit increased 11 percent to $1.5 billion between Jan. 1, 2005, the last time Port Townsend was assessed on the county’s four-year assessment cycle, to Jan. 1, 2009, Assessor Jack Westerman said last week.
The assessed value of Reynolds’ house increased in 2009 by 30 percent to $192,970, though the land it sits on remains valued at $170,500.
Non-exempt property owners in Port Townsend pays $8.0258 cents per $1,000 of valuation in property taxes to support county government, conservation futures, the Port of Port Townsend, the Jefferson County Public Utility District, the city of Port Townsend, the state school levy, the Port Townsend School District bond and levy, the Port Townsend emergency medical services levy and Hospital District 2, Westerman said.
That means Reynolds paid $2,918 in property taxes on $368,165 of value in 2009.
That’s OK with Reynolds.
“I do believe in paying taxes,” she said.
“Otherwise, nothing would get done in this country. The issue is equity. I don’t understand why, if someone bought [a house] recently, their taxes should go up so much more than people who didn’t buy recently.”
The assessed parcels do not include tax-exempt, publicly-owned parcels and buildings held by taxing districts such as cities and schools, and state-assessed properties and parcels owned by power companies for transmission lines that cross county borders.
Nor does it include parcels in open space-timber that will be assessed after the state sets timber prices and the market value of the land is known, or the total comprised of senior exemptions such as those held by Abbott.
Jefferson County is divided into four sections for tax assessment purposes.
Each section is physically inspected and a new valuation set once every four years.
The new assessments are based on sales of comparable property from the time of the old assessment.
That creates a four-year lag during which the market can fluctuate, and it did, Westerman said.
Twice as many tax appeals were filed in 2009 compared with 2005.
But the number of Port Townsend challenges four years ago — 49 — is almost identical to this year’s 43 Port Townsend appeals, Westerman said.
Both times, about half the total appeals were outside the revaluation area, which Westerman said makes sense given the drop in the housing market.
The period between 2005 and 2009 includes housing price increases of 20 percent in 2005 of and 15 percent in 2006, but declines of 10 percent in 2007 and 10 percent in 2008, he said.
Westerman predicted Port Ludlow property owners will suffer the brunt of housing-market turmoil when their turn comes for revaluation.
Parcels there were last assessed between 2003 and 2007, when the property prices peaked, and won’t be assessed again until 2011.
“Port Ludlow experienced the most precipitous drops,” he said.
“Their values are in general 20 percent to 25 percent too high, according to today’s market,” Westerman said.
“People tend to like the four-year cycle when there are upturns in the market,” he added.
“But then, what goes up goes down. What they don’t like is when it goes down.”
But those with senior exemptions are to an extent insulated from price fluctuations.
The Abbotts bought their 1885 Victorian three-bedroom home on Lawrence Street in Port Townsend for $100,000 in 1983.
Its non-exempt value was $368,165 in 2005 and increased 10 percent by 2009.
Their Code B senior exemption, which they received in 2007, saved the day.
“That’s why we did not get real excited” when the couple received their tax assessment notice, Donna Abbott said.
“We would have a cow if we didn’t have that exemption.”
In Clallam County, all land and property was valued at $8.3 billion, compared to 2008’s $8.6 billion, a decrease of $300 million.
New construction in Clallam County, including unincorporated areas, also nosedived from $175 million in 2008 to $65 million in 2009.
ON MONDAY: Amount of taxes property owners will pay not known yet.
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Staff writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.
