With two(!) School District operating referenda happening this week, it’s crucial to understand exactly how changes in school tax rates affect your annual property tax bills. Let’s get a common misconception out of the way:
- If I put my house on the market today, its list price is what my property taxes are calculated on.
- WRONG. Market value of your property today has absolutely zilch to do with your property taxes. Assessed value, which is the value of your property and home as it would have been 35 years ago, is what your taxes are calculated on. Assessed value has one purpose: taxes. It has nothing to do with the sale price of your home, when it was built, who built it, what you’ve done to improve it. Nothing. In New Castle County, the last property assessments were done in 1983, so whatever your property and home were worth then, is what your assessed value is now. Even if your house was built yesterday, its assessed value is in 1983 dollars.
How do you know what the assessed value is? In New Castle County you can go here to look up your parcel: http://www3.nccde.org/parcel/search/
- Put in your Street Number, and your Street Name (with no suffixes, Ave, Ln, St, etc). If your address is 125 Main Street, you would put in 123 for Street Number, and Main for street name
- Put in your city.
- Click search.
- You’ll see a list of parcels that match your search criteria. Click “Details” next to the one that matches your information.
- Scroll down in the new window that opens and you’ll see “School Taxable” and a value. That’s your Assessed Value.
Kent County’s search is a little more difficult: http://kent400.co.kent.de.us/PropInfo/PIStName.HTM. You have several search options to choose from, but the easiest (if you’re looking up your own parcel) is search by Owner Name. Alternatively the Street Name search would be the next best option. Again here, you’re only putting in the NAME of the street, no suffixes.
- When you click “search” you’ll see a table with the heading “Assessment” followed by values. Total value = Assessed Value.
Sussex County: also not as straight forward as New Castle County: http://www.sussexcountyde.gov/zoning-and-sales-information. Again several options to choose from for your search. If you go by billing address you’ll come to a page that looks like this:
- Click on “Appraisal & Assessment Info” to see something like this:
- Total assessed value is the taxable value of your property which appears to be 50% of the value in 1974 dollars (yes, 1974. Sussex property values are 43 years out-of-date).
So now you know what your Assessed Value is for your property. So by how much will your taxes go up?
Let’s use the Indian River School District as our example. The average assessed value in Indian River is: $19,472, BUT property taxes are per $100 Assessed Value. This is the single biggest mistake property owners make when they try to calculate their tax bills and ultimately why so many people get angry when they “figure out” what their new tax bill will be when School Districts ask for a tax increase. Your bill isn’t based on a $19,472 assessment, it’s per-hundred dollars of your assessment! Divide your assessment by $100:
$19,472/ $100 = $194.72. (do the math with this value) Indian River’s current combined School Tax Rate is $2.578 per $100 Assessed Value. Your school tax bill for Indian River works out to be: $2.578 x $194.72 = $501.99 per year. Or about $41.83 a month.
Indian River is proposing an operating referendum increase of $0.49 per $100 Assessed Value. So how would that $501.99 annual school tax bill change?
Again, take your Assessment and divide by $100: $19,472 / $100 = $194.72.
$194.72 x $0.49 = $95.41. Your school taxes would increase by $95.41 to total $597.40 per year, or $49.78 per month.
That’s $7.95 more per month increase to support schools.
Now, say you didn’t know property taxes were per $100 assessed value and you did this math: $19,472 x $0.49 = $9,541,28! A $9,500 increase! Yes, people do it that way and get furious with the School District until it is explained that you must divide by $100 first.
This formula is used statewide. So find out whatever your Assessed Value is (remember, that is NOT your property’s market value), divide it by 100, then multiply by the increase being requested by your School District.
Obviously this is the average, so there will be higher and lower tax bills when the referendum passes, but this is the system we use in Delaware.