Property taxes are on the rise, again.
The City and Borough of Juneau mailed out property value notices Tuesday, informing property owners of the annual assessed values of their properties. Some property values didn’t change at all, while others increased as high as 10 percent. The total increase of property tax this year will be around 3.5 percent, which is similar to previous years, City Finance Director Bob Bartholomew estimated.
“I think the prior years, the increase may have been spread out more,” Bartholomew said Tuesday, “so we had a slightly higher percentage of more properties that changed. This year, we have less properties that are increasing or changing, but some of them are seeing a larger increase.”
About 60 percent of the 12,600 taxable properties in the borough saw an increase in property value, the city estimated. Two residential regions saw their property values increase the most, but Bartholomew said he couldn’t specifically say what areas. He described one area as single-family housing just northwest of Auke Lake, which saw about a 10 percent increase, and another area, which he called “South Valley,” saw an 8 percent increase.
Before Tuesday’s increase, an average homeowner in Juneau would have likely paid about $3,730 in property tax for a $350,000 home in 2016, Bartholomew said. If that same family’s taxes increased by 3.5 percent this year, that same family would pay an additional $130.
Bartholomew explained that the three main factors leading to higher property values are rising market sales, new construction and remodeling. He also mentioned zoning changes and neighborhood enhancements as factors. Not all of the overall property tax increase stems from the increased value of existing properties, though.
“Part of our increases are new construction or remodel, so when I say taxes went up by 3 percent, not all of that is due to taxes existing last year,” Bartholomew said. “Part of that is due to new items that were built or remodeled in 2016, so it’s a combination.”
Property values set a baseline for property tax, as the CBJ Assembly will adopt a millage rate during the upcoming budget process, and the millage rate will determine just how much tax citizens will pay. Bartholomew said he’s proposing the same millage rate as last year, which would keep the property tax down as much as he can control.
CBJ revalues properties every year, assessed on what comparable properties are selling for within a neighborhood. Alaska state law requires municipalities to assess all taxable property at full market value. The 3.5 percent increase in property tax also applies to local businesses.
Property owners have until April 27 to file a petition for the city to review their assessed property and rule whether the increase or decrease in value was too steep. Property tax bills will be mailed around July 1, and taxes are due on or before the close of business Sept. 30.
In 2016, CBJ collected about $48 million in property taxes, with $26 million going to the Juneau School District, $15 million going to general government operations and $7 million paying the debt on general obligation bonds. The increased property taxes this year are expected to increase that collection by $1.5 million.
Juneau’s high housing prices have plagued residents for years, as there’s very little buildable land available and there’s always a high demand for affordable housing. According to Zillow — a site that tracks housing values in the United States — the median home value in Juneau is $320,000, which is far above Alaska’s median home value of $267,400. Juneau’s median home value reached as high as $337,000 in May 2015.
Zillow estimates that housing prices in Alaska could rise 5.5 percent in the next year alone, keeping with a trend in America’s Northwest. Seattle’s property values have skyrocketed in recent years, and the cost of homes across the state of Washington in general were rising faster than any state in the nation, as of 2016.
• Contact reporter Alex McCarthy at alex.mccarthy@juneauempire.com or 523-2271.
An area known as the “Flats” in downtown Juneau. (Michael Penn | Juneau Empire File)
