OAK HARBOR, Wash. — A Whidbey Island man is feeling the pinch after his property values skyrocketed over 800 percent this year.
"I thought it was a mistake," said Brian Dernbach. "It's unbelievable."
Dernbach said he has always faithfully paid the taxes on the modest cluster of Oak Harbor apartment buildings he bought as an investment toward retirement. The land underneath those apartment buildings has been valued at around $99,000 for the past six years.
But this year, his property was suddenly appraised at more than $940,000. Dernbach’s tax bill more than doubled to over $14,000.
"They assessed my property at a certain value. I paid it. That was that," Dernbach said. "I figured they were doing their job properly."
It turns out there was a mistake, but Dernbach still has to pay.
"The easiest answer is human error," said Island County Chief Deputy Assessor Jason Joiner.
According to Joiner, Dernbach appealed his valuation to the local board of equalization in 2009. Because land values are updated en-masse, they must be marked with an amount “over-ride” to prevent them from being swept into the mass land value updates for that year. The override for the property should have been immediately removed in 2010, so the value would be adjusted with the market sales in future years, but for some unknown reason, it wasn’t.
Joiner said a software system artificially froze Dernbach's values for all those years as the market rose. A transition to a new software system could be partially to blame. That, combined with the fact that a physical land assessment is only done every six years in Island County, also contributed to the mistake.
"Our office isn't perfect. Our appraisers aren't perfect. Every once in a while, something will escape the notice of our appraisers," Joiner explained.
All that said the current assessment is accurate, and Dernbach has to pay.
Joiner pointed out the Dernbach ended up saving an estimated $68,000 in taxes during those years because his rate was too low.
"He got a terrific bargain," said Joiner. "This taxpayer should count himself fortunate to have saved such a significant portion of his tax burden during the time the error was on the books."
Regardless, the unexpected tax bill means Dernbach will likely have to raise rent for his tenants. In his view, no one is coming out ahead here.
"We're trying to provide affordable housing and still make a living," he said. "This makes it tough."
Here's the bottom line for property owners.
While your home is appraised every year, your property might not so make sure to check with your county assessor's office. You can do that online.
If the value has remained the same for more than a year, call the county assessor’s office to make sure you're being taxed the right amount.