Kootenai home values surge 40%

Property values in Kootenai County broke another record with an average 40 percent increase, highlighting the battle cry by local officials for Idaho Gov. Jim Risch to call a special summer session of the Idaho Legislature.

“This is why we’ve got to have significant change, or this is going to drive folks out of their homes in Kootenai County,” Assessor Mike McDowell said Friday.

The county will mail 77,982 assessment notices Monday showing county property owners the value of their land and homes. The majority of those notices will reflect a change in valuation.

Net property values in Kootenai County are estimated to total $14.2 billion, which is up about $4 billion from last year. Since 2003, net property values have more than doubled. Last year’s record-breaking surge was 34 percent.

The assessment increases reflect the hot real estate market where buyers are paying more for property in Kootenai County than ever before. As people pay inflated prices for property, it makes it difficult for many other residents – especially retirees – to afford taxes on their homes and land, McDowell said.

In 2005, the average price for a home in Kootenai County was $232,339, compared with $138,908 in 2002 – the year right before the real estate boom hit. Yet wages remain more stagnant, making it difficult for many residents to buy a home or pay property taxes on existing properties, McDowell said.

U.S Department of Housing and Urban Development statistics show that in 2005, the median family income in Kootenai County was $50,150. That means half the families in the county earn more than that and the other half earn less. The 1990 median family income was $30,013.

New development in Kootenai County added about $590 million to the county’s tax base – up about $121 million from last year. That includes the 2,250 new homes built within the county.

Last week, Risch stirred speculation around the state by saying he’s open to the idea of a special summer session of the Legislature on property tax reform, if lawmakers can come to a new agreement on the issue.

But House Speaker Bruce Newcomb said even though the state now has a $137 million state surplus, he doesn’t see any new consensus between the House and Senate on major tax shifts, such as moving school operations funding from the property tax to the sales tax. The House repeatedly passed proposals to do that this year; the Senate repeatedly killed them.

McDowell said removing school operations funding from property taxes is likely the only way to get homeowners true relief. He said school maintenance and operation costs are funded with 77 percent property taxes and 23 percent state revenue.

Kootenai County Commissioners Gus Johnson and Rick Currie agree that Risch should call a special session. “They need to get down there,” Johnson said. “Property taxes are a very important issue that the state needs to take care of.”

This session, the Idaho Legislature increased the homeowner’s exemption to $75,000. The increase means that $2.4 billion of homeowner exemptions weren’t counted in the net property values for the county. The benefit to individual homeowners will vary widely, but on average they will see a $300 tax break.

McDowell said that will give property owners some help, but because the rate of appreciation is rising so quickly it won’t be significant enough.

The county had hoped to get the assessment notices out earlier but is still working out the kinks in a new computer system.

Here are answers to common questions that tend to arise when assessment notices begin arriving:

Q: Will my taxes go up because of the higher value?

A: Not directly. McDowell said it depends on the budget of each taxing district, ranging from cities and schools to the local highway district. The tax burden is distributed based on values, so your tax bill will fluctuate based on how your neighbors’ parcels fared. Just because the average net property value in Kootenai County increased 40 percent doesn’t mean your property tax bill will increase by the same amount.

Q: Who decided what my property is worth?

A: Buyers and sellers in the real estate market and the economic laws of supply and demand. McDowell said appraisers just track what happens in the market. State law requires that 20 percent of the propertties in the county be physically examined each year.

Q: Don’t believe your assessment?

A: When property owners open their assessments they usually ask, “Can I sell my property for this amount?” McDowell said everyone should start with a degree of caution. He suggests that people check what other homes in their neighborhood are selling for. Idaho law prevents the disclosure of real estate sale prices. But McDowell said you can drive around your area and look for “For Sale” signs and fliers showing asking prices. People can also go to housevalues.com and get a “ballpark figure” or look online at real estate listings for your area.

If that doesn’t answer your questions, McDowell said, people should contact his office either by calling (208) 446-1500 or dropping by the County Administration Building at 451 Government Way in Coeur d’Alene. Last year the assessor’s office talked with 7,700 property owners, fielding 200 phone calls each day. Most concerns are cleared up this way, McDowell said.

If you still disagree with your assessment, you have until June 26 to appeal to the Board of Equalization, which also is the Kootenai County Commission. Last year about 100 appeals were made, with only a few resulting in changes, McDowell said.

Q: If my neighbors sell their home for $1 million, does that mean my $100,000 house is worth that?

A: No. One sale is not representative of market value, McDowell said.