After the home revaluation, both local governments were forced by state law to drop their tax rates in order to achieve what is known as a revenue-neutral tax rate. It is from that revenue-neutral rate that Raleigh and Wake County chose to then raise their taxes to balance operating budgets for the 2008-2009 fiscal year.
Raleigh raised its tax rate 4.18 cents to 37.35 cents per $100 of assessed property value. Wake County raised its rate 2.5 cents to 53.4 cents per $100 of assessed property value. Whether your tax bill will skyrocket, rise moderately or even drop from last year depends on a host of factors, the most critical of which is how much your home's value appreciated from 2000 (or when it was built, if after 2000) until 2007.
Wake County's revenue director says that if your home's assessed value rose by more than 30%, you would have faced a tax increase even under the revenue-neutral tax rate, and with the additional tax rate hikes come additional tax bill increases.
"If you're a homeowner with a mortgage that has an escrow account, I would look very quickly to see if my escrow payment is gonna be sufficient to cover if I have an increase in the tax bill over last year," said Wake County Revenue Director Emmett Curl.
But Curl points out that about 67% of Wake County homeowners would have seen a decline in their tax bills with the revenue-neutral rates, and even with the newly imposed Raleigh and Wake County tax-rate hikes, most of those residents won't see a huge jump in their 2008 tax bills.
Those whose home values did go up significantly will see significant tax bill increases, however. We caught up with Raleigh resident Chris Farlow, who lives inside Raleigh's Beltline, near N.C. State. His home value soared when it was reassessed last winter; we calculated his tax bill will jump $660 this year over last year.
"I don't think the bite would be as big if they were evaluating it every other year and it was a bit more incremental," Farlow said. "In the dollar sense it's gonna be a lot more this year."
Farlow said he thinks he'll be able to handle the increase, but feels for those who may be a bit more strapped financially, especially during the current economic downturn.
"I know it probably does hit people differently," he said. "Two or three kids and a couple of cars and then gas and then this and, I mean I could definitely see where it would be a bit of a strain on people having all of this happen right now, and it's unfortunate timing."
Wake County property tax bills should arrive in the mail the last week of July. They may be posted online within the next week or two.
You can calculate your Raleigh property tax rate here.