Lowering assessed property value to lower to tax bill

Tax, SDIRAs & Cost Segregation
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Lowering assessed property value to lower to tax bill

Phillip Lebron
Rental Property Investor · Virginia Beach, VA · Member since 2023 · 10 posts · 3 votes

Is it difficult to get your property assessed value lowered so you pay less in property taxes?

What are possible pros and cons?

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  • Kevin Sobilo
    Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
    3y

    @Phillip Lebron, I'm sure this is going to vary a lot from state to state. 

    In my state (PA), its not that hard to appeal the assessment and potentially get them lowered. I've only done it when I honestly think the assessment is off because in theory they could actually RAISE the assessment if they look at the facts and decide its actually too low! I think that risk is very very low, but it is not impossible.

    The last time I did it, I had bought a severely distressed house and was rehabbing it into a rental. It was only going to be a B-/C+ type rental and that is what I told them and I also pointed out a mistake in how they measured the house. They were counting an unfinished utility space as finished space. Those kinds of factual errors are hard to argue with.

    I did get a reduction of about 20%, if I remember right. So, it was well worth the effort. 

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  • Marc Howard
    Investor · Baltimore, MD · Member since 2023 · 38 posts · 10 votes
    3y

    @Phillip Lebron 

    Lowering your property's assessed value is def not a walk in the park, but it's possible.

    First thing you gotta do is appeal with the tax assessor's office. And don't forget to gather some strong evidence like similar property sales or assessment inaccuracies.

    obviously, a lower assessed value means less taxes. More dough for you, right? But there's a downside. When it's time to sell, potential buyers might think there's something fishy about your property with that lower value, making it tough to sell.

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  • Basit SiddiqiBusiness Member
    Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
    3y
    Quote from @Marc Howard:

    @Phillip Lebron 

    obviously, a lower assessed value means less taxes. More dough for you, right? But there's a downside. When it's time to sell, potential buyers might think there's something fishy about your property with that lower value, making it tough to sell.

    Buyers do not look at the assessed value of a property when making an offer.
    If anything, they would appreciate a lower valuation because that means they are taking over a property with lower property taxes.

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  • Chris McCormack
    Accountant · Edina, MN · Member since 2020 · 172 posts · 97 votes
    3y

    We recommend clients to consider this as a way to decrease their overall tax burden. One thing we find is that the county or state is quick to come at you when your value increases but not as quick when the value decreases. Decreased value = decreased property taxes = tax savings!

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