Property owners shocked by whopping tax increase

The Dernbachs weren’t prepared for an increase in their tax bill of over 100 percent this year.

Brian and Joanna Dernbach own an apartment building on West Whidbey Avenue, which like many commercial properties in Oak Harbor, hadn’t been appraised for six years until 2018.

The assessed land value had been $99,426 since 2010 and jumped to $940,025 in 2018, an 845 percent increase.

“We can’t go to our tenants and jack up our rents to pay for that, so it’s going to come out of our pocket,” said Brian Dernbach.

His experience isn’t exactly unique, which is largely due to the nature of commercial property assessments, according to Island County Assessor Mary Engle. These properties only get evaluated by someone from the assessor’s office every six years, she said.

And because comparable commercial properties aren’t being sold very often in the meantime, market values become difficult to track, she said.

“You don’t have grocery stores sell as often as you have houses in a neighborhood sell,” Engle said.

In the Dernbachs’ case, she said, their property was under-assessed for years and was increased to be comparable to nearby apartment complexes.

The family appealed the assessment, which was upheld by the Island County Board of Equalization.

The couple chose not to appeal at the state level.

Brian Dernbach said he believes he is penalized for the county’s mistake.

“I understand screwing up, but they screwed up for eight years.”

He wants to warn others of the possibility of their taxes skyrocketing.

Dernbach said he is hoping legislation gets passed at the state level to prevent such dramatic increases from happening at once.

States like California and Minnesota have caps on the percentage that assessed values can be increased each year.

Engle noted that, in the Dernbachs’ case, the sale price of the property the family paid in 2006 wasn’t far off from what the assessment came at in 2018.

She said the low assessments after 2006 should have been an indicator to the owners they probably weren’t paying the total value.

“It’s unfair to taxpayers,” Engle said.