While I was looking at some property information on Main Street, I noticed a disparity between the assessed value of the property and what actual sales have been. Here are the properties adjacent to the Pere Marquette on Main:
| Property ID | Address | Assessed Value | 2007 Taxes |
|---|---|---|---|
| 1809206011 | 533 Main | $14,280.00 | $1,174.82 |
| 1809206012 | 531 Main | $178,700.00 | $14,701.58 |
| 1809206013 | 527-529 Main | $87,580.00 | $7,205.18 |
| 1809206014 | 519 Main | $58,780.00 | $4,835.82 |
| TOTAL | $339,340.00 | $27,917.40 | |
That gives those properties, according to the tax assessor, a fair market value of $1,018,020 (i.e., three times the assessed value). However, also according to the assessor, these four properties were sold for $1.05 million in 1997, and $1.5 million in 2004. So the current assessed value is lower than the properties were worth over 10 years ago, and a half-million dollars lower than they were worth four years ago. Underassessment means lost revenue to the city as well as the county.
Are we talking about a lot of money in lost tax receipts here? Maybe not one year from just these four properties (although every little bit helps when the city is looking at a $2.2 million deficit). But over time, it adds up.
And what if this isn’t an anomaly? What if other downtown properties are underassessed? I think it’s worth investigating, especially with the city in need of extra money and contemplating raising taxes and fees. Why shouldn’t downtown property holders pay their fair share?
This is small potatoes for them. The biggest bang for the buck is hitting the $200,000 plus newer construction single family homes. Those families can’t take a breath without getting an assessment increase. I know. They can afford it, right? (meant rhetorically, not a slam against you CJ)
If you are trying to prevent any redevelopment in the downtown (except for that accomplished with tax dollars) a good way to do it is to raise the taxes of current owners.
CJ- how can you make a statement about downtown properties not paying their fair share? What a downtown office building is worth is a complicated issue. You can’t compare those buildings and downtown land to anything else in the city.
Slow news day and your trying to stir something up.
Mouse — When certain properties are underassessed, that means others are subsidizing those properties. You’re defending a hidden subsidy while decrying overt subsidies.
Peoriafan — “What a downtown office building is worth is a complicated issue”? Well, explain it to me, please. I’m just a dumb homeowner who has to pay taxes on an assessed value that would indicate my house is worth more now than when I bought it three years ago, even though the housing market is down. So pardon me if I question how a property that sold for $1.1 million in 1997 and $1.5 million in 2004 only pays taxes as if the property were worth $1 million today. I’ll bet there are a lot of unenlightened people like me who might wonder what “complicated” formula they get to use downtown that is unavailable to middle-class working folks out here in the neighborhoods.
THAT’S RIGHT! WHAT HE SAID!!!!!!!!
Comparables are used for Downtown properties too? My residential assessment never goes down regardless of the current housing market and I live in one of those neighborhoods too. I agree with CJ, please help the uneducated residential property owner to be enlightened.
The housing market may be down but average price in the Peoria area is up. I think it’s up 5% but I’m not sure.
All that means Josh is that the more expensive homes are the one’s selling the best.
CJ, you are a great read. I love it when you find things out like this.
Harry,
Duh. Are YOU not aware of C.J.’s mob affiliation[s]?
Isn’t a property’s assessed value for property taxes supposed to be one-third its market value? If so, it appears those above are fairly assessed.
State law doesn’t allow for a property to be assessed based on it’s last selling price. it is a factor, but the comparables help generate the assessed value. I know for a fact that other areas in the City of Peoria are under-assessed and that many areas are over-assessed.
CJ, you are reading things into my comment. I was not necessarily “defending” the “hidden subsidy,” just stating a fact. Now that you mention it, though, perhaps we should consider whether the “hidden subsidy” of underassessment is good policy? Does it actually save taxpayer dollars by reducing the outflow of “overt subsidies”?
I think an argument can be made that it does. Is that fair? Again, I think an argument can be made that it is. The City spends huge sums on infrastructure “improvement”/maintenance to support shopping centers/malls/sprawls, but comparatively little to support downtown business. Of course, I remain of the opinion that the property tax itself is regressive, antiquated, and should be abolished. If a small downtown business ecking out a small profit happens to sit on piece of real estate they have owned for years, and the lot next to them sells for a high price, why should they then have to pay inflated property taxes on a continuing basis? They haven’t sold their property. They aren’t making any more money because their neighbor walked away with his sale money. It just doesn’t make any sense.
State law doesn’t allow for a property to be assessed based on it’s last selling price.
WHAT??? That is crazy. Please post that law.
“The market value of your property is determined by available sales information and property characteristics.”
http://www.peoriacounty.org/assessmentSupervisor/process
There is a no better comp for a recently sold property than the property itself, assuming it was an “arms lengths” transaction.
PI – Although the statement you posted is accurate, it in no way supports the contention of bbbb that state law prohibits a properties assessed valuation be based on its last sales price. In fact, a property assessment is frequently based on its last sale price, as well it should- at least for a year or two after the sale.