Tax Assessment Values Drop: A Good Thing?

March 3, 2009

Capitol Hill by Kyle Walton

DC’s Office of Tax and Revenue just mailed out 2010 tax assessment notices to property owners. So by tomorrow, most home and condo owners will realize (if they didn’t already) that their property has lost value in the last year. But maybe that’s a blessing in disguise.

A full 190,000 properties have been reassessed to reflect current market values as of January 1, 2009, and the vast majority of the District’s neighborhoods saw a drop in value. The average change for residential properties in fiscal 2010 is -3.67 percent. (In fiscal 2009, there was a 2.3 percent increase.)

Let’s give those numbers some meaning.

Sarah, an employee of a local magazine, bought a two-bedroom, two-bath condo in 2006 at The Argyle in Mount Pleasant for about $410,000. Last year, she paid taxes on an assessment of $417,000. This year, that dropped to $404,000.

A friend of Sarah’s who purchased a two-bedroom, 1.5-bath condo down the block at an older development saw the tax assessment on her property drop by $30K this year, and she noted that everyone in her building was talking about losing value.

But perhaps in these cash-strapped times, the lower assessments are a good thing.

“Unless you are trying to sell right away, it just means that you are paying lower property taxes this year,” Sarah told UrbanTurf. “The value of the property will eventually go back up.”

Sarah’s husband owns a rental property in Shaw that has been valued at $500,000, but she says it is not worth that much. She thinks that the new assessment will bring the value and the tax payments down.

She’s probably right: Residential properties in that area saw a drop in tax-assessed value of 10 percent.

For the DC government’s full list of percentage change by neighborhood, click here.

Areas with the biggest drops were Michigan Park (-15.57%), Crestwood (-13.36%), Petworth (-11.71%), Woodridge (-10.99%), and Riggs Park (-10.10%).

Very few neighborhoods actually saw assessments rise, and if they rose at all, it was modest (except for Bolling Air Force Base where the increase was 10.19%): Forest Hills (+1.82%), Burleith (+1.78%), Central (+1.73%), Palisades (+1.51%), and Foggy Bottom (+1.20%).

1 Comment

bes said at 1:38 pm on Wednesday March 4, 2009:
This is always a case of “csn’t win for trying”. People are either unhappy because their property is assessed lower or unhappy because their property taxes went up. The real question is which would you rather have? Obviously, over the long term, it would be the property tax increase assuming that followed a higher assessment but a one,two or possibly three year aberration might not be bad. I would also add that by living in the close in D.C. area, we are fortunate to not have suffered property assessment declines such as are seen in a great number of other geographical areas. Suppose you lived somewhere where your property value declined as fast as part of your investment portfolio?