Property taxes growing, but the burden is shared

Nez Perce County residential property owners will continue to see their assessed values rise this year after the hot real estate market of 2021 forced upward adjustments to every class of single-family home.

But Assessor Dan Anderson said that an accompanying increase of new taxpayers will help soften any resulting increases in property tax.

“Just because your home’s assessed value may go up 20%, it doesn’t mean your taxes go up 20%,” Anderson said. “Certainly, residential property owners will pay more, but there are more players who help alleviate the tax bills by spreading it out.”

The sharp increases in home values were caused by a severely limited supply of single-family residences that pushed people to pay well above assessed value — or even asking price — last year. Assessments for this year are based on retail sales for calendar year 2021, a year when Anderson said bidding wars between prospective buyers became the norm.

That ultimately puts more and more pressure on the county’s homeowners. Anderson described the property tax component of local government budgets as a balloon that can only contain a certain amount of money. And when residential values rise while other property values stay the same, the tax burden shifts.

“What it reflects is who’s paying the most money, like squeezing that balloon,” he said. “The amount of air is still the same, but it’s a lot less on one end, and a lot more on the other. And in this case, when you squeeze it, we’re talking about residential properties.”

But the silver lining is a tax base that is growing at a significant clip. Chief Deputy Appraisal Coordinator Brad Bovey said that in 2019, the county saw 88 new homes built and six new commercial buildings; in 2020, 93 new homes and seven commercial buildings; and in 2021, 95 new homes and 11 new commercial buildings.

“So in just 2021, we had a total of 106 brand-new taxpayers,” Bovey said. “So those people are taking the weight off of you and me.”

Bovey also shared numbers for property sales over the past three years that indicate an accelerating pace for new home starts. In 2019, there were 546 residential sales in Nez Perce County, 52 bare land sales and 91 manufactured home sales. In 2020, there were 592 residential sales, 76 bare land sales and 83 manufactured home sales. And while residential home sales in 2021 increased modestly over the prior year to 610, and manufactured home sales dipped slightly to 80, there was a huge jump in sales of bare land to 168. That is more than double the number from the year before.

“So that bare land is going to transition into new houses,” Bovey said.

And as Anderson’s appraisers have been plugging in all the high sales prices into their formulas, they are finding that most categories of single-family homes are underassessed, with current values sitting between 72% and 92% of market value. So most property owners will again see their value go up when assessments are sent out this spring.

“In other words, buyers have been paying more than assessed value,” he said. “By a bunch.”

He added that an expected rise in interest rates should slow down the spending spree, except for people who managed to make a bundle selling their homes in other states and then bring that pocketful of cash to Idaho.

Anderson noted that more than 150 sales of single-family homes last year were rentals, a development that has made the already bleak rental market even worse.

“There are people that recognized the market was good, and they decided to go ahead and sell these rentals,” he said, using a 750-square-foot, two-bedroom, one-bath house that sells for $230,000 as an example. “They’re going, ‘Gee whiz Doris, I think we just need to put that on the market and see what we can get.’ ”

But he concluded that what goes up must eventually come down, a cycle that has never failed during his 34 years in office.

Asotin County

In Asotin County, new construction and updated tax assessments can help lower the overall property tax burden for individual homeowners because the debt is more spread out.

According to Assessor Jenny Rynearson, 1,155 households with seniors or disabled residents receive property tax breaks. More than 8,500 single-family residences in the county pay the full tax rate.

Asotin County is on track to collect $21.9 million in property taxes this year, Rynearson said.

“Property taxes are super critical for schools, local governments, operating budgets for the library, cities, emergency medical services and other things we all depend on,” she said in a recent Tribune article.

Latah County

In Latah County, annual property assessments have been going up. Most residential and commercial property owners saw increased assessments over the last year, according to Latah County Assessor Rod Wakefield.

“The Assessor’s Office is responsible for tracking sales and adjusting home values based on sales trends,” Wakefield wrote in a news release last year. “We do not set the market or speculate; we respond to the market as it has occurred.”

The average single-family home sales price in Moscow was $305,343 in 2019, $330,401 in 2020 and $333,401 through April 2021.

Whitman County

According to Whitman County Assessor Wraylee Flodin, the county isn’t seeing a large increase in values on assessment, but it is seeing a substantial number of sales of properties.

“More people are selling because of the market and more people are buying because of the market,” she said.

Whitman County saw a declining growth in the total property taxes levied in the past three years. It saw an increase in $7 million from 2019-20. Then a $2 million increase the following year. It has increased just under a million dollars from 2021-22.

In Whitman County, all real property is revalued annually, with a physical inspection completed at least once every six years. New construction is appraised annually.

Flodin said new construction is on the tax rolls, but it is occurring slowly because of a shortage of supplies and workers.

Editor's note: After 19 years of stellar reporting for the Lewiston Tribune, Joel Mills has left the newspaper and is now a victim advocate and legal assistant in the Nez Perce County Prosecutor’s Office. The Tribune wishes him well. The Tribune's Kerri Sandaine and the Moscow-Pullman Daily News' Angela Palermo and Anthony Kuipers contributed to this report.