As Omaha’s housing market continues to run strong, Douglas County’s tax valuations are taking another big jump just to keep up.
With the local housing tax base rising by almost $2 billion overall, the increase raises the likelihood of significantly higher property tax bills for local homeowners.
But Diane Battiato, Douglas County’s assessor/register of deeds, said she gets tired of the “finger always pointing at the Assessor’s Office” as tax bills increase.
Battiato said her office is doing what’s required under state law to keep up with the housing market in Douglas County — and prices that have been escalating for years.
Overall, Douglas County’s tax value on existing homes increased almost 6% this year. That’s on top of a 7% increase last year and almost 6% the year before.
The increase this year alone will add $1.95 billion to the residential tax base — potentially translating to tens of millions of dollars in higher taxes paid by home and property owners.
As local governments set budgets and tax rates later this year, they have the opportunity to lessen the impact on homeowners, Battiato said. She urged taxpayers to take up the issue with those governments this summer.
“I’m as frustrated as the next person,” she said.
This month, homeowners are seeing the individual changes to their valuations.
A World-Herald analysis found that just under half of the properties in the core of Douglas County’s housing tax base rose in value this year. Out of properties experiencing an increase, the average hike was more than $24,000.
At current tax rates in Omaha, that shapes up to be a roughly $500 increase in property taxes per homeowner, although a more precise figure will depend on how tax rates and property tax credits shake out.
Homeowners now have a chance to challenge the tax value set by the Assessor’s Office. Property owners have until June 30 to file an official protest with the local Board of Equalization, and referee hearings will be held through mid-July.
As of the middle of last week, property owners had filed 1,276 protests in Douglas County — behind last year’s pace but well above what the county had seen at this point in 2019 and 2018.
“We understand the prices of homes is nuts,” one retired homeowner argued in his protest. His west Omaha home’s valuation increased from $214,000 to $224,700.
But he said that unless he sells his home, the market doesn’t really affect him. “Please help if you can.”
The current valuation proposal “is unfair and unrealistic,” another wrote in arguing to drop a $101,400 valuation. His Florence home’s value was $80,000 last year.
A south-central Omaha homeowner said his valuation hike is making it difficult to live in Douglas County “with these unfair increases especially for retired people like myself.” His value rose from $123,400 to $151,100.
Bill Swanson, a Realtor with Berkshire Hathaway HomeServices Ambassador Real Estate and president of the Omaha Area Board of Realtors, is accustomed to getting calls after homeowners receive their tax valuation notices in the mail.
As people question the valuation, Swanson said his first question back is typically: Would you sell it for that much?
They often don’t think that they can, Swanson said.
But Swanson recalled one client recently wondering about his increase from $70,000 to $150,000. Swanson told him he could probably sell the home for $170,000.
Homeowners are now feeling the brunt of the market increases through their tax valuations, Swanson said. Still, he said, the Assessor’s Office can overshoot on some property values, and that’s why a protest process is in place.
But Swanson said the local real estate market is experiencing a period of exceptionally low supply.
At one point last week, Douglas and Sarpy Counties had just 485 existing homes listed for sale. That’s compared with a typical market supply of about 6,000 homes eight or so years ago, he said.
Overall, Swanson said the local market is not building enough homes to address the demand.
Local prices reflect the rising market.
According to Omaha Area Board of Realtors figures, the average sale price of existing homes in the Omaha metro area has risen from $199,630 in 2017 to $247,923 last year. Last year alone, the increase amounted to 8.6%.
State assessment law requires Douglas County to keep tax valuations within a close range of actual market values — anywhere from 92% to 100% of full market value.
This year, Douglas County’s home valuations are considered to be at 94% of market value.
Battiato said her office set higher increases in neighborhoods including North and South Omaha and Benson to respond to higher sale prices. But the Assessor’s Office is responding to similar activity in all areas of Omaha, she said.
Battiato said she understands that the changes can be jarring for homeowners. But she said her office must respond as it has until the housing market changes.
“Where it’s going to end, I don’t have a crystal ball,” she said. “Nobody does.”
Battiato has become increasingly vocal in challenging local governments for their role determining a homeowner’s property tax bill.
Speaking before the Douglas County Board earlier this year, she said she refused to take the hit for rising property taxes.
Battiato said local governments can potentially receive a windfall from the higher valuations. Overall, Douglas County’s tax base is increasing some $2.8 billion.
While local governments can help out homeowners, Battiato said it’s apparent that “they don’t want to do it.”
“It’s very obvious they don’t want to do it.”