How They Influence Your Home Buying Decision
In 2017, tax assessors swept through Buncombe County — the area surrounding Asheville, including the city itself — to reassess property to reflect a more accurate tax-assessed value and property taxes. Tax assessments happen every eight years, although they may be necessary prior to that deadline if property values change, either up or down, by more than 15 percent. The last two Buncombe County reappraisals came in 2012 and 2005.
An increase in a property assessment doesn’t necessarily mean that the taxes on that property will rise. In the past, the County Commissioners reset the tax rate so that the new taxes were “revenue neutral,” meaning that property taxes essentially remained the same. But that’s not always the case.
Changes to Property Values
According to figures released by the county, most property values have increased substantially. Of course, as Asheville, North Carolina, gains popularity as a destination across the country and demand for property increases monthly, it comes as no surprise that property values are also rising. The surprise arrived with exactly how high the increases turned out to be. The largest changes in the county were:
- Downtown Asheville: 44%
- Kenilworth: 40%
- Southside: 40%
- Montford: 38%
- West Asheville: 38%
- Central Asheville: 33%
- Kimberly: 32%
- Oakley: 31%
- North Asheville: 30%
- Weaverville: 32%
- Woodfin: 32%
- Avery Creek: 29%
- Biltmore Forest: 23%
- Town Mountain: 23%
- Reynolds: 22%
- Hazel: 21%
- Reems Creek: 20%
These figures clearly show that property values in Asheville have increased far more than property values in the surrounding county. This comes on top of mostly higher property prices in the city than outside it. Yet despite the rising prices, competition for houses remains high.
What Homebuyers Need to Consider
While assessments have been mailed out to homeowners, the tax bills have not. It’s still uncertain whether taxes will rise or remain flat. When you’re looking to buy property in Asheville or Buncombe County, find out what the current property taxes are on the property you’re interested in. This should be a normal part of your process anyway, since property taxes are often collected in an escrow account as part of your monthly mortgage payment, along with your homeowner’s insurance.
In a worst-case scenario, the tax rate will stay the same, so property taxes will rise by the percent change of the reassessment. It’s likely, however, that the real increase will be somewhere in between where it is now and this worst-case number. But you can’t know for certain until the County Commissioners decide on a tax rate. And there’s always the possibility that the new tax rate will be revenue neutral.
Property Taxes and Lenders
Most lenders — including independent mortgage lenders like Prime Mortgage Lending of West Asheville (dba PrimeRate Mortgage Lending, Inc.) — don’t like uncertainty, and for good reason. If property taxes are higher, your overall monthly mortgage payment goes up accordingly. If you’ve found the perfect house within your budget, but then you discover the property taxes have increased 30 percent, that house may no longer be in your budget.
Therefore, you must know what the property taxes are for a property before you make an offer. Your Realtor has to know your monthly budget to show you only those homes you can afford. Your mortgage lender has to communicate not only how much you can borrow, but also how much you can afford to pay each month. A good lender like Zack Adam can break it down for you. Contact Zack today.