City assessed value/taxes went up 2x is it legal?

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Hey BP just just got a 2021 Notice of Assessment for a property I closed on in Nov 2020. The city states that taxable value went from $23126 to $40100. Taxes are now increased by an additional $1585 a year ($132/month) which pretty much doubles the taxes. Needless to say this cuts a good chunk of profit I was counting on. Property is still profitable just not as much obviously.

FYI Previous owner lived there for 26 years & purchase price was $83k. I am shocked that a city can just literally double the assesses value and taxes due in one swoop, is this legal? How do you prevent this kind of a surprise in the future when shopping for investment properties, I mean you run your numbers do all the math and then its all invalid after the purchase? 

This has happened to us.  It has happened when the old owner has had the property for a long time.  Another time it happens is when we buy an a deep discount, rehab the home and do a refinance.  Both purchasing and refinancing can trigger the taxing authority to reassess the property.  When we buy, I usually will try to find comps that were sold 18-36 months before and look at what their taxes did.  I run my numbers based on their taxes, not the taxes of the home I am buying.  That way the first year you get the 1st month without a mortgage payment and the 1st year lower taxes as bonuses.  The second year you will be close to the numbers you ran.  It doesn't always work out exactly, but its better than getting hit in the face with double taxes.

It's a pretty standard process to reassess after a new purchase.  Otherwise, towns and counties would never get a chance to increase their revenue :-(.  ) basic research on setting up your proforma prior to purchase should have brought this to your attention, as should have bank when they assessed (if you used a loan), your agent (if you used one), and/or your accountant (if you used one).  Given the low value (40k), I'm guessing you did this solo.  Thank goodness it isn't doubling on a multi-million property.  Chalk this up to a learning experience and keep your chin up. 

That said - there are processes you can follow to dispute this with your local tax authority  Not dispute their right to increase or re-assess, but to use your own comps and inspection reports to say it ISN'T worth 40k and try to get them to lower the assessed value.  It DOES work sometimes.   (However, if you bought for more than 40k, your argument gets tougher!) 

You need to understand what triggers a reassessment in your jurisdiction. The rules are as variable as the jurisdiction, each one is different. 

You may be able to appeal the reassessment, but whether you can do it and how successful that will be will also depend upon local law.

@Alexander Kleyman a tax assessment and an increase in taxes based on the sale price is something that should be accounted for in underwriting because if the property hasn’t been sold in a long time and taxes haven’t gone up in along time, there’s usually a good chance it’ll be reassessed after a sale. You can try to contest it, nearly double sounds pretty bad.

I was mad when our 1st one went up.  When I looked at the numbers I couldn't justify trying to challenge it.  The numbers were inline with the homes on the block and other homes with the same value in the area.  That is why I started looking tor "Tax rate comps" before the purchase.  It is always a numbers game.  Also remember that if you see your cashflow go down $50- a month it comes off your expense before income tax side.  So it's likely that if your RE is sheltering some of your personal income the $50- is really only $35 after the tax man cometh.