Property valuations skyrocket in Kootenai County

COEUR d’ALENE — Kootenai County property owners may be in for a shock when they receive their 2022 property value assessment notices, which are reportedly expected to arrive in the mail this week.

“My anticipation is (property value assessments) are going to be significantly higher than last year,” said Kootenai County Treasurer Steve Matheson.

For example, one single-family home in Coeur d’Alene with an assessed total market value of around $392,000 last year, is now assessed at around $638,000 — a 62% increase in just one year.

The same home had an assessed total market value of $330,000 in 2020 and $308,000 in 2019.

Total market values are the assessed property valuations prior to application of a homeowner's exemption.

Meanwhile, the assessed total market value of one Post Falls home jumped from about $309,000 in 2021 to a little more than $478,000 in 2022. The home has more than doubled in assessed value since it was built in 2018.

The Kootenai County Assessor’s Office is responsible for assessing the market values of more than 97,000 parcels.

Idaho law requires the county assessor to make, or attempt to make, a physical inspection of a property once in a five-year cycle. Otherwise, the assessor creates an assessed value for a property based on the sales of comparable homes in the area.

The value established by the assessor must be within 90% to 110% of fair market value, based on property sales information.

County Assessor Béla Kovacs told The Press he was unavailable to comment Thursday on why many assessed property values have skyrocketed in one year.

If property value jumps significantly in a single year, according to the Assessor’s Office website, it could be because a physical inspection revealed significant improvements or because the property is located in a “hot market” with higher sales data.

But Matheson said that even as property values rise, property taxes likely won’t go through the roof.

That’s because Idaho uses a levy-based tax system.

In this system, taxing districts — which include cities, counties, school districts, community college districts, hospital districts, highway, water and sewer districts and more — set their budgets, determining the revenue each district needs.

Taxing districts can increase their budgets by a maximum of 3% per year, plus an amount for new construction and annexation.

The budgets of all taxing districts are totaled and then divided by the total sum of all property values in the boundaries of the taxing districts. That determines the levy rate.

The levy rate is then applied to each property in the taxing district's area in order to calculate the individual tax charges for each property.

When budgets increase, the levy rate also increases, causing property taxes to rise. But property values do not influence the levy rate.

Matheson said the biggest issue in property taxes is the ongoing shift in tax burden from commercial properties to residential payers.

In 2016, the Idaho Legislature capped the homeowner’s exemption at a fixed amount, currently $125,000.

With the tax exemption limited and home values rising, that means residential customers pay a larger percentage of a taxing district’s bills than they did before, while commercial and agricultural properties pay less.

“It’s causing a lot of people heartburn,” Matheson said.

He said he expects the tax shift to drive conversations in the Idaho Legislature this year.

Though property owners can appeal their assessed value by contacting their county assessor’s office, Matheson said he believes the best course of action is to attend and comment at public hearings where taxing districts determine their budgets.

He encourages residents to ask about how their taxing districts are increasing their taxing authority and why.

“You’ll have a greater impact on your actual property tax liability doing that than complaining about market value,” Matheson said.