Friday, June 6, 2014

Dorchester Property Owners See Property Tax Valuations Fall 6%


The Dorchester Times is one of the only sources of local media, online or otherwise, that frequently publicizes reports on property taxes.

We usually bring you the bad news.  Today, it's good news we share -- at least for homeowners.  And we want to give credit where credit is due.

Dorchester property owners should have by now received notice that within the village, property assessments have seen a 6% decrease in improvements and buildings.  That means that a homeowner that previously had a house with an assessed value of $125,000 will now see their assessed value drop to around $117,500 for tax year 2014. 

That will mean some sizeable savings when the property tax bill arrives.

Why the drop in assessed values in Dorchester? We can think of one main reason: the original Keystone oil pipeline that runs through our school district.  You can thank TransCanada for your drop in property taxes.

Meanwhile, the news isn't as good for farmers and farm land owners.  Saline County farm land owners saw very large increases in land valuations, since ag property was revised using prices from ag land sales from October 2010 through September 2013.

Also, in nearby Western, that village increased valuations on improvements and buildings by a whopping 8%.

Remember that in Nebraska, the property tax is levied only by local governments -- mostly school districts, counties, cities, and NRDs.  The tax on real estate is levied based on the actual or market value of the real estate.  Most is assessed at 100% of actual value, but ag land has been assessed at only 75% of actual value since 2007.

Recall our story from last summer that showed Crete and Friend school districts have significantly higher property tax levies than Dorchester.  

5 comments:

  1. Sorry Dweller, I have to disagree with your reasoning behind the valuation drop: The Keystone improvements may be behind a drop in overall tax amount paid, but it would have very little influence in a homeowner's property valuation decrease.
    In Nebraska, property valuations are based on market indicators. The more dollars that near-by and similar properties sell for - the more your property is worth and valued for. You correctly identified that ag property has seen significant increases lately, due to increasing dollar amount ag land sales.
    The reverse is also true. If near-by and similar properties are selling for less - your property will be worth and valued for less.

    If property valuations in Dorchester did indeed drop it means that: 1. There are limited number of market sales for homes in Dorchester which mean that there is a low-volume sales database for the Assessor to draw a market rate value from. Or 2. That the homes themselves are depreciating in value due to age, neglect, or some other debilitating reason.

    Translation: Either people are not buying and selling homes in town, or the homes are not being taken care.

    This also becomes a larger problem: Imagine going to a bank to get a $125,000 construction loan to build a home that once constructed is now worth only $117,000. Most financial institutes will not be this generous with their money.

    Overall, while it may be good for the individual tax payer right now - in the long run it will become a further liability to the future of the town.

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    1. Hmmmm. You might have a point but with this logic, if Western's assessments went up 8%, are you saying there's a boon of hot property there or folks are doing $100,000 renovations? I drove thru Western yesterday. I don't think so.

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  2. I agree the pipeline helps, but reality says gravel streets and unkept properties decrease the value of all homes in our town. Your house is not going to appreciate in a town without pavement.

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  3. Correction in the article, Keystone did not lower the valuations, It helped out on the levee but not valuation. Next, With village valuation down 6% and ag land up 40%, it a tax shift from village to ag land.

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  4. Fair points made above but the dweller is right in that local gov't doesn't collect more than its projected needs, and no doubt the oil pipeline has boosted overall tax revenue. As to the folks complaining about increase agricultural land valuations, farmers know who to blame ... their neighbors bidding silly prices at those land auctions. I got news for ya boys, corn aint gonna be $8 again in the next 10 years.

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