Tempe will increase its property tax rate next year, but the city expects the typical homeowner will pay about the same tax bill as this year because of falling property values. The City Council agreed on Thursday to continue with a policy that generates the same amount of the secondary property tax revenue for the city every year, even if that means adjusting the rate to compensate for shifting home values.
The city plans to increase the current rate of $1.79 per $100 of assessed valuation, which results in a tax bill of $267.05 for the median single-family home valued at $149,500. The proposed new rate of $2.14 will result in a tax bill of $266.60 next year, when the median home value will drop to $124,500. The city will build in a 2 percent increase to account for inflation.
Actual bills will vary slightly, depending on how each home’s value has changed.
Mayor Hugh Hallman said residents should not expect big increases despite published reports that used incorrect information to predict larger tax bills. The city will formerly adopt the new rate after holding property tax hearings June 14 and June 28.