Property owners will likely see a drop in their home values when Butler County releases its three-year reappraisal update later this year.

Home values are expected to drop by smaller percentages than surrounding counties, some of which have seen double-digit drops, according to Auditor Roger Reynolds.

The decrease will mean a majority of residents will pay less for property taxes, Rogers said, but people in certain parts of the county could see increases in their tax bills if voters pass certain levies.

Average residential and agricultural property values declined 4.8 percent from 2009 to the 2010, said Julie Joyce-Smith, Butler County real estate director.

A downside of the property values reduction is it will cut more into the county’s revenue stream for property tax collections and could cause more cuts to an already tight budget.

Reynolds said he expects Butler County to be holding values equal or better than surrounding counties, due to successes in the east side of the county.

For the past year, the county auditor’s office has been looking at broad market conditions, neighborhoods and home and commercial property sales in 2009 and 2010 to do the update. County auditor offices are required by law to do a broad statistical update every three years and do a reappraisal by looking at individual parcels every six years, Reynolds said.

The plan is to release the three-year update on property values the first part of December, which will become effective January of this year, retroactively.

“We know the values are coming down,” Reynolds said.

He said sales values in the market continue to decline, but he can’t project how much the county’s average decline will be. The total value of all property in the county per the previous update is more than $7.8 billion, according to Joyce-Smith.

The loss of home value, the biggest investment of most people’s lives, will cause homeowners to lose equity, which in some cases could hurt their retirement, said Phil Morrical III, director of development of Morrical Realty. Some people could have less value in property than what they owe on it, he said. Then if a homeowner’s or other building owner’s property sells at a reduced price, they could end up still owing money to their lender.

“It’s a far reaching and complicated issue,” Morrical said.

The county looked at 3,000 individual properties of 160,000 total parcels in the county, used aerial photography and other methods to come up with the updated values, Reynolds said.

But Rogers said the values won’t be as steep as other counties’ revaluations because he did a formal update in 2009 in response to declines in the housing market that overvalued property. This allowed property owners to see some small drop in their tax bill sooner and the government to get a gradual reduction in taxes instead of a sharp decline, he said.

“The market was rapidly declining and I felt that was important to reflect in property values,” he said.

Home and commercial property prices peaked in the first part of 2006 in Butler County, Reynolds said

Even though home values are expected to drop, it doesn’t mean everyone’s taxes will. Levies collect the same amount of taxes no matter the value, Reynolds said. If more tax levies are passed by voters, certain property owners could see an increase in taxes, he said.

“Therefore regardless of the drop in values, those particular levies are going to continue to collect the same amount,” he said.

Before the property value update is released, the office is doing quality checks and reviewing new construction. Owners will be notified of their new values by mail and can contest them next year. Then after this update comes out, Reynolds said the county will start work on the six year reappraisal.

Contact this reporter at (513) 705-2551 or clevingston@coxohio.com.