Will contesting property value affect my refinance?

Question

I'm currently on my first rental that i purchased last year. The purchase price was $170,000. I just received a letter from the city stating that the property has appraised for $177,00. For tax purposes, I'd like to contest this to lower my tax bill, however my concern is that i'm planning to refinance this property in the next 6 months and I'm not sure if the lower appraised value from the city will affect the amount that i can refinance the property for. I've never done a refinance so I'm not sure if this is a factor that would affect this sort of thing.

So here's the questions. Would contesting the city appraisal to lower my taxable property value also lower the amount that i can refinance for? Or will a lender do their own appraisal and ignore the city's appraised price? Should i contest the appraisal?

Thanks!

-Alex

So here's the questions. Would contesting the city appraisal to lower my taxable property value also lower the amount that i can refinance for? Or will a lender do their own appraisal and ignore the city's appraised price? Should i contest the appraisal?

Thanks!

-Alex

Bill B. · Answer

Contesting the city value won’t affect the refi appraisal. (To avoid this fight you’re about to have many taxing authorities have raised tax rates 25% and dropped tax values 25% at the same time. I don’t have any properties I would sell in M’n or NV that I would sell for their taxed value. In NV I might not take double the taxed valued.

BUT, your DREAM result would be back to $170k, I don’t think they’ll believe you if you say it worth less than you paid last year. So make sure a 5% discount on your property taxes is worth the fight. (Is that $50? More? Less?) they’re saying a 4% increase in a year. it was probably more than that or maybe you should invest in another area.

Ps. If your taxing authority is liek many/most across America your taxes should have gone up quite a bit if you bought the property from a home owner as the property is no longer taxed at the homeowner rate. If you did buy from a home owner, and your taxing authority gives a discount for home owners you might walk out owing more taxes, even if they lower the value but hadn’t changed your tax rate to investment yet.

Patrick Britton · Answer

@Alex Nelson "Would contesting the city appraisal to lower my taxable property value also lower the amount that i can refinance for? Or will a lender do their own appraisal and ignore the city's appraised price? Should i contest the appraisal?"

No.  Yes and yes.

glad to be of service  :)