The Lancaster County Assessor has reassessed home values a year early to keep up with the rapidly rising home prices.
The preliminary values, which will be used for property tax calculation in 2020, are now on the assessor’s website and postcards will be mailed this week to 100,000 home and ag land property owners.
These are preliminary values, the beginning of the reassessment process, and homeowners can schedule an informal hearing with assessor’s staff if they think their home value is not accurate or they want more information.
This is the value the county assessor believes is close to market value or what you could sell your house for. It’s also the value that will affect your local property taxes.
An increase in property value doesn't necessarily guarantee higher tax payments in 2020, since government entities like the city, county, school district, natural resources district, etc., establish the tax levies, but some increase is likely.
Many Lincoln homeowners will see double-digit increases in their values on the assessor’s records because of the rapidly rising home prices, said Rob Ogden, Lancaster County assessor.
A recent report from the Federal Reserve Bank of Kansas City pointed to Nebraska's heated housing market in 2018, where home prices have increased at their fastest pace since 1994.
In Lincoln, home prices have risen at an average rate of 8.4 percent in the past four quarters, exceeding even the growth rates of the 1990s, said the June report.
The county traditionally reassesses housing values every three years, but the home prices are increasing too rapidly to wait that long, said Scott Gaines, chief deputy assessor.
“(The three-year reappraisal cycle) is dead,” said Ogden. “It appears to be a two-year cycle because of market conditions.”
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Though home values on average will see a double-digit increase, some individual homes will see a drop in value and some will remain the same, Ogden said.
State law requires values for tax purposes to be set at or near market value, and near is defined as no lower than 92 percent of market value.
If values drop below that 92 percent, the state can require counties to raise values, explained Gaines.
When the market was creeping up, at 2 percent to 3 percent a year, the assessor’s office could wait a couple of years between reassessments and still have the values on the tax records at 92 percent of market value.
With housing prices heating up, that longer cycle is no longer possible.
“We are required to do what the market is doing,” Ogden said.
He suggests homeowners look at the value set by the assessor and say, "Can I sell my property for that?"
If they don’t think that is the market value, they can schedule an informal hearing with the assessor’s staff, where staff can get correct information and consider changing the value, Ogden said.
While home values are rising, dry and irrigated ag land values are dropping. That change will be reflected in new values for ag land in the county, Ogden said.