Property Taxes 101
No one enjoys paying taxes. But can we all agree it would be near-impossible to sustain city and county services without them? Road construction, sewer maintenance and street lights are all financed in part by your property taxes, which are projected to provide about 16% of the city’s 2020 revenue, or $181,370,252.
How Are Property Taxes Figured?
It all begins with the Register of Deeds, the county department that records and maintains an ever-growing “library” of legal documents connected to land and building ownership or “real property.”
“We deal with anything that connects property to owners,” says Register of Deeds Diane Battiato. Since 1854, they’ve been tracking “millions of records. It only grows, it never gets smaller,” she says. The Register is legally bound to keep these records in accessible condition in perpetuity.
In 2013, approximately 13 million pages and documents became digitally accessible via dcregisterofdeeds.org, under the “Premium Services.” For security, members of the public must create a free account by registering and creating a password before searching the records. Property records may be accessed using name, legal description (on your tax statement) or document number. There is a charge for copies.
The Register’s office keeps a history chain for every single one of the 221,454 parcels in Douglas County. “We have an account of title, mortgages, releases, everything that would happen on a single property,” says Battiato. Her team is meticulous and takes this responsibility very seriously, because these records prove legal ownership. They show who has the right to live on a property, sell it, rent it, pass it down — without official ownership documents, the deed and the title, you have no rights to a property.
“The deed is the document that gives you the title to your property,” says Battiato. “The deed has to be recorded for somebody to actually OWN a property. When you deed that property to me, now I own that property, which says I have title to that property. Title is not a physical thing. The deed is physical, the title is the essence of your ownership. You have a title to your motor vehicle, and that IS a physical thing! But a title to your property is when a deed has been filed, putting it in your name.”
The Douglas County Assessor
Battiato also leads the Douglas County Assessor’s office. The two offices officially combined in 2015.
There isn’t much overlap between the two offices except for this: Every time a deed or a property ownership transfer is recorded at the Register of Deeds, a Real Estate Transfer Statement must be filled out to record all the details of the transaction. The transfer statement is electronically saved in a folder and the information is sent to the assessor’s office.
Battiato says the real “in your face” job of the Assessor is to decide the fair value of all parcels of property in the county. She cannot say this enough: Assessors do NOT set tax rates. They assess value.
Property values are “a constantly moving target,” says Battiato. New school across the street? Big flood? Values go up or down accordingly. Her team of appraisers mass-evaluates each of Douglas County’s 18 markets. These are generally aligned with school districts since housing stock clustered around a school tends to make it easier to compare “apples to apples.” County assessments are always mass appraisals, never house by house. Individual appraisals like those done for a bank loan are called “fee appraisals.”
Mass appraisers also look only at “valid sales” (sales NOT due to foreclosure, discounted by the bank or sales between family members). They must consider current market trends and conditions, the addition or removal of new improvements, remodeling or rehabilitation, outside influences on the property, or a state government order to increase value. The appraisers use an appraisal book to get adjusted figures for a complete and defendable determination of value.
Property owners can a protest valuation in three ways; beginning in mid-January, they may make an appointment with a personal assessor at the Assessor’s office to review the property valuation; if that is unsatisfactory, they can go before the County Board of Equalization in June or July. The last effort would be before the Tax Equalization Review Committee (TERC) in Lincoln.
What Are Political Subdivisions?
What image leaps to mind at the words “local government units with taxing authority aka political subdivisions?” Unless you are a local government super-nerd, probably nothing. But their budgets set your property taxes.
Your annual property tax bill from the County Treasurer contains a table of inscrutable letters. These are abbreviations for some of the 30 plus political subdivisions that rely on your property taxes to function — the City, the County, the school districts, the local community college and Natural Resources Districts.
After properties are recorded and valued, those values travel “to the county boards, to the city council, to every school district, to the fire districts, to all of those little percentages of taxation. Those political subdivisions also work within budgets.” says Battiato. Her offices works most closely with the Douglas County Board of Commissioners, which acts as the executive of the county, levying local taxes and administering county governmental services.
“They have their budgets that they’re currently working with,” says Battiato. “The problem is instead of staying as frugal as possible, when they see valuations overall go up, it’s much easier for them to take the windfall! If they have a six or eight million dollar windfall, they should be able to tighten their bootstraps like they would if there was no increase in valuation. They should say, We’re going to stay status quo on the mill levy or we’re going to lower the mill levy, because their decisions on their budget are what effects what comes out of people’s pockets.”
So, the property tax you pay is calculated like this:
(The value of your home set by the assessor)
X (The assessment rate, 1.97% of a property’s assessed fair market value)
X (The annual budgets of local government units with taxing authority)
= PROPERTY TAX AMOUNT