Your property tax bill is made up of two parts:
- Property value
- Tax rate
They are multiplied to get the dollar amount owed.
Tax Rate Set in Budget
The tax rate is set by elected officials in the annual budget. The Wake County budget process, like that of many municipalities, begins in May. Public input is encouraged before the budget is adopted, typically in late June. Wake County and its 12 municipalities operate on a July 1 - June 30 fiscal year, so the tax rate that will apply to your new property value goes into effect July 1, 2008.
The notice of assessment that you will receive by mail in mid- to late-November is simply informing you of your new property value. You will receive a tax bill based on this new value in July 2008.
What does “revenue neutral” mean?
You will hear this term used during revaluation, and it often is misunderstood. If the tax rate is set at “revenue neutral,” it does not mean that your taxes will stay the same as the previous year. “Revenue neutral” is a budget term that essentially means that revenues brought in by property taxes in a reval year would be about the same as if the revaluation had not taken place.
Generally, the tax rate is lowered to offset or “neutralize” the effect of higher property values. If commissioners set the rate higher than this, they are required by law to inform citizens that they have increased taxes.
Again, it does NOT mean that property owners will be paying the same amount in taxes next year as this year. If your property values increased below the average – for instance, around 25-30% -- your taxes would remain about the same next year with a revenue neutral rate. But if your property value increases significantly – around 75% or higher – you will most likely see taxes increase by one-third or more.