Tax Assessed Value vs Seller's asking price
Hello BP Community. I am currently looking into a mobile home with land. The seller is asking for about 3x more of the price than what the Property Appraiser Tax website shows for the Assessed Value. I know the market is hot now, but which is the correct price/value of the property that I need to base my negotiation price?
The assessed value and the market value are two completely different things. One is not necessarily dependent on the other. Especially in FL with our homestead exemptions, if the owner of this property has owned it for a long time and has an active homestead exemption from the time they purchased it, the assessed value is capped at only increasing 3% annually. Unfortunately, if you were to purchase this property then the county would then reassess the property the following January and then YOU would pay the increased property tax rate. (which then you could homestead and cap the increase of the assessed value at 3% annually)
@Carlos Asuaje Thank you for your input. Per the Tax records, it does not state that it has a Homestead Exemption. The seller does not live in this property and is currently used as a rental.
@Dolly La Salle tax assessed value and fair market value are two entirely different things. Assessed value is determined by the county assessor for the purpose of calculating property taxes. Each county is different but rarely is a property tax rate 100% of market value (San Francisco is the only place I know that does that). Usually the mill rate is more like 40%. The most recent tax assessment could also have been done several years ago. So we don’t typically use tax assessed value to determine market value. Fair market value is what a buyer would pay for the property, which is determined by recent comparable sales (or cap rate/ income based approach for commercial/ multifamily property).
#3 1031 Exchanges Contributor
- Investor
- Las Vegas, NV
Please click on the magnifying glass at the upper right and search for your question. It is literally asked monthly if not weekly.
TLDR: 5-10 years ago counties got sick of people clogging up their sweet money grabbing system saying the values they were being taxed on were higher than they were worth. So one county came up with a sweet plan that everyone copied. Cut all the values in half and double the tax rate. Since you can't fight the tax rate only the value you have to go away while they get just as much money. Feel free to google Clark county assessor. And then type in any address you see for sale on the MLS and see if the assessed value is over or under 1/2 the listing price.
Go ahead and check the assessed value on your primary home and see if you would see for that. Just google your county’s assessors website and out your address in.
@Steve K. Thank you for your input. I understand it now.
@Bill Brandt Yes, I checked my property and others as well in the Counter Assessor website. They were all valued at under 1/2 the listing price. I have a better understanding about the tax assessed value. Additionally, the site has a lot of other good data that is helpful in knowing about a property. Thank you for your feedback.