Tax appraisal significance?

6 Replies

How significant is the tax appraisal of a property? I'm looking to flip a property and the comps for the area are showing properties of this type are selling for 55-65k but the tax appraisal on the property is 6700. How significant is this? Should I cross this property out as a flip? I'd be purchasing for 20k.

@Skylar Dejesus

I work in commercial property tax valuing retail centers, office towers, and million square foot industrial buildings.

The assessed value of the property has ZERO to do with what it is actually worth. The market knows, the assessor rarely does. Weigh all of your research on the market and where sales point. Looking up an assessed value for anything other than a property tax appeal is moot.

Typically property tax appraisals are a function of a municipality's base tax for revenue generation and are not significant to market value. The only time you would want to worry about property taxes is when they are very high in comparison to your buying point and holding costs and also if they will pose a hindrance to a potential buyer of one of your properties. Actually the lower your property tax the better. Again is it is not a figure you use to determine market price of value. 

I'm my area of TX, assessed value and market value are usually fairly close, even on older properties. So for me, assessed value is at least a start. Your mileage may vary.

Newbie here. So now I know not to "justify" a purchase price based on property tax appraisal. Should I just ignore it completely? I was looking at a duplex and saw the assessed tax amount is on a downward trend.