‘The market has been very hot’: Mat-Su homeowners see significant increase in assessed property value
PALMER, Alaska (KTUU) - Matanuska-Susitna Borough homeowners have recently pulled the 2023 Real Property Assessment Notices out of their mailboxes, and many found that their taxable value has jumped quite a bit.
Borough Finance Director Cheyenne Heindel cited a still-hot real estate market in the Valley as the reason for the increase.
“The determination of value is based on a number of factors, the largest one being what the market is doing,” Heindel said. “The market has been very hot, housing prices, housing sales have gone extremely high.”
The assessment division reviews home sales, listings, and sale prices to determine a home’s value each year. Factors including location and structural similarities are all taken into consideration before fair market value is placed on each property.
The COVID-19 pandemic figuratively set the real estate market on fire. Low-interest mortgage rates caused housing prices to skyrocket and, in turn, caused buyers to go well above the asking price to contend. Nationally, that trend has slowed, but the Mat-Su has seemingly remained steady.
“Traditionally, Alaska has always been opposite the national trends,” Heindel said. “However, I think even we are seeing a little bit of a slowdown.”
According to Heindel, the average taxable growth for a Valley home increased 8% over last year, while the year before homeowners saw a 10% increase. It’s a considerable hike in value compared to the years preceding the pandemic.
“A normal year prior to COVID we were looking at about 2.5% growth in values,” Heindel stated.
With this year’s 2023 property assessments, Heindel said that “right now the estimated taxable amount is $12,356,580,000″ after property and mandatory exemptions are subtracted.
While the increase in assessed value will likely mean a higher tax bill at the end of the fiscal year, property taxes are calculated based on areawide mill rates in the borough. The borough website defines it as “a rate of tax to be assessed on all taxable property” and that they “are expressed in terms of $1 of tax per $1,000 of assessed value.”
The mill rate is redetermined every year. An initial rate is proposed in the borough’s fiscal year budget process but is ultimately set by the assembly. For example, the FY2023 mill rate was set at 8.9 mills, after the assembly voted to decrease the borough’s originally proposed rate of 9.942 mills.
“The whole point of reducing a mill rate is because we knew prices were going up, we knew people were going to be impacted,” Heindel said. “So they chose to reduce the mill rate.”
It’s important to keep in mind that the areawide mill rate is just one of five general tax areas. Depending on where an individual owns their property, homeowners are also subject to non-areawide mill rates — which include services such as animal care and libraries — as well as road, fire, and special service areas. The rate of each of these taxable areas is determined by the assembly upon the adoption of every fiscal year budget.
The total amount of mills each household is taxed can be viewed using the borough’s myProperty search engine.
Homeowners also have a chance to weigh in on the borough’s budget process in the form of three public hearings. The Mat-Su Borough is set to introduce its FY2024 budget to the assembly on Apr. 18, with next year’s mill rates expected to be set sometime in mid-May.
Individuals who believe their property was over or under-valued in their assessment are encouraged to file a formal appeal to the borough’s assessment division by Feb. 28.
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