HELENA — The value of residential property in Montana dropped by 2.85 percent from 2008 to 2014, the state Revenue Department’s recent reappraisal found.
“This is exceptional,” Revnue Director Mike Kadas told an interim legislative committee Thursday. “This hasn’t happened, before except maybe in the late ’70s or in the Great Depression.”
During the 2008 reappraisal cycle, the average market value on residential property rose by 55 percent statewide.
Kadas said the areas where residential property values grew the most in the 2014 cycle were in the Eastern Montana from the oil and gas development in the Bakken and high wheat prices in other areas in eastern Montana, in the Golden Triangle and along the Hi-Line.
Property values soared by 102.13 percent in Richland County, 66.72 percent in Sheridan County, 66.16 in Daniels County, 64.5 percent in Prairie County and 63.56 percent in Wibaux County.
In contrast to the 2008 reappraisal when their average values skyrocketed, residential property values in Flathead County dropped 14.84 percent in this reappraisal, while Gallatin County’s residential values fell by 13.2 percent and Ravalli County’s decreased by 10.84 percent.
Here’s increases to average residential property value in other urban counties; Butte-Silver Bow, 7.54 percent; Cascade, 6.83 percent; Lewis and Clark, 0.16 percent; Missoula, minus 1.92 percent; and Yellowstone, 10.33 percent.
These are just county averages. Actual residential values will vary by individual pieces of property.
Here is the breakdown of residential properties statewide, according to the department:
262,654 went down in value.
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252,962 went up in value.
2,613 stayed the same.
The department’s model assumes the elimination of the phase-in of new values and assumes the Legislature will modify the rates and exemptions to maintain taxable value neutrality on a statewide basis.
Kadas told the Legislature’s Revenue and Transportation Interim Committee that the higher values do not necessarily mean higher property taxes.
“The dynamic of how taxes change in a location depends on the make-up in the county,” he said. “It depends on the mix (of different classes of property) in each jurisdiction.
Property values are just one factor in determining property taxes. Past legislatures have adjusted the values through phase-ins and a deduction on the value known as a homestead exemption. These lead to the taxable valuable which is multiplied by local and state mills to calculate property tax bills.
In addition, state law provides for capping mechanism affecting property taxes collected by local governments and schools.
Taxpayers are expected to receive their new assessment notices frrm the Revenue Department in the summer of 2015. They may appeal them formally or informally.
The Revenue Department also did a reappraisal of agricultural and commercial properties.
Ag lands went up 16.72 percent, while commercial property increased slightly by 2.45 percent.