All Forum Posts by: Richard Sanderson

Amie: I didn't mean to imply that you would lie (sorry). But some people do make a game out of trying to tell less than the truth to the local assessor or building department and end up hurting themselves more. I didn't want to see that happen to you. If your local assessor will take a current CMA as evidence, that's great! Many of the readers of BiggerPockets are from various locations, so I'd recommend checking with the local assessor, like you did. And really, best of luck with your appeal. I always encourage people to challenge their assessments.

Amie:

An “unrealistic rate of appreciation” is not a good argument for a property tax appeal. As Alan mentioned it may have been several years since your county adjusted assessments. Property tax laws are unique to each State, and can vary by county or city within a state. The local assessor’s objective is to estimate the market value of your property, and all other taxable properties in the county, accurately and fairly. To my knowledge few States have a provision that limits the percentage of assessment increase.

Most assessors do not consider the amount that a property transferred at foreclosure to be an indication of market value. A foreclosure in most States is a legal proceeding, not an arm’s length sale between willing buyers and, especially, willing sellers.

A revaluation by a county may include a “drive-by-appraisal,” but the local assessor probably knows much more about what you have done as far as physical improvements to the home. For example, the local assessor gets a copy of, or has direct access to, every building permit issued by the county building department. And I wouldn’t recommend lying to the building department to avoid a large permit fee or hope to find things from the assessor. Independent appraisers hired by banks and review appraisers hired by bank auditors or bank over-sight agencies reconcile actual observed construction features with assessment and building department records.

You mentioned that your Realtor has found recent sales for you to use as support for lowering your assessment on appeal. Surprisingly enough you DON’T want recent sales. You want sales during the same time period that was studied by the county assessment office to revalue all properties in the county. If the assessor considered all residential sales in your neighborhood for the 24 month period ending September 30, 2013, (they need time to assess all properties and perform administrative functions too) use those same dates for your comps. Otherwise the assessor or appeal board can disregard your sales as being “outside the date range of sales.” It wouldn’t be fair for you to use comps from November and December of 2013 when everyone else had their assessments determined from sales through an earlier date. Ask the county assessor the “period of time studied” for the revaluation of your neighborhood.

As Steve mentioned, an appeal of your assessment can result in the assessment being lowered or raised, or just left the same. It’s rare that it will be raised, but I’ve seen it done. Just remember, they need just as much convincing evidence to raise it as they do to lower it.

Best of luck with your appeal.

Justin: Assessor's value, in this case $47,667, is not a current valuation. Assessors typically have only one "effective date of valuation" each year, or even older, that is historical, in that they trend values, and do not perform an annual revaluation (when properties are inspected and methodically calculated). Even if the assessor had a valuation date of July 1, 2013, they used historical sales data (12 to 24 months old) to estimate assessed vales. Just a caution.

Jason: While more and more assessors are getting sales information online, it's typically not as up to date as MLS or other real estate data sources. Many assessor carry out additional sale verification activities, but may not make such verification or additional sales information available to the general public. Keep in mind that assessors normally only value real estate on one effective date each year and have to carry out other program objectives in addition to the collection of sales data.

@Dawn A. Offers a great solution for separating land out of your total property value. I've been a local assessor for more than 30 years and have gotten numerous calls from the IRS verifying the land and building assessments for tax filers using this method. So I know first hand that the IRS has accepted it as a creditable method.

In the name of quicker access to real estate information in the hands of local government folks (register of deeds, local assessor, tax collector, county surveyor and map providers, etc.) I've drafted a contact list for the Greater Portland, Oregon, Metro Area. As a pilot study, I'm asking local real estate professionals, builders, renovators, and anyone who would like to contribute to look over the draft product FIRST. I'm hopeful that we can collaborate on this and develop a free information product that can be used by the entire community. If you want to contribute the draft document is [/http://ow.ly/kxcSHl] here.

In most states, when a property is sold it is recorded in the Recorder of Deeds office (deed registration office). So they are the source for property transfers, but local real estate MLS and title insurance companies worked to make it happen. The local assessor usually updates their assessment and tax records within 30 days to reflect the transfer, but some smaller office may be further behind. The local assessor generally assigns the Parcel Identification Number. So they are the source for the property identification number, EXCEPT where MLS or lenders are using a Tax Identification Number instead. If that's the case the city or county tax collector may need to be called. If the entire parcel sold then then parcel id number stays the same. BUT if only a portion of the parcel sold, or more than one parcel sold, you'll need to ask the assessor to tell you if a new property id will be assigned. I hope this helps.

John:

I just want readers to know that local assessors in all states don't reassess when the subject property is sold as Keith Barton mentioned for Ohio. California is probably best known for this practice but most states have a required or suggested frequency for reassessment and are discouraged from using the sale price as an indication of the assessment because it causes inequities (those who have purchased recently have the highest assessments). What most local assessors do is take all of the arm's-length transfers during a study period (usually 12 to 24 months) and considers them in reassessing all of the properties in a market area.

Mark:

I have to strongly agree with Ryan M. You need to be sure of how the local assessor is going to act on the subject property. In all states in the U.S. the local assessor decides which properties qualify for tax exempt status. And most states require that a property not only be owned by a religious organization BUT actively occupied or used by the religious organization. The local assessor in some states can re-instate the taxable status for up to three PRIOR years if the owner didn't qualify under the occupancy or use provision. Be sure that the current owner is responsible for all property taxes prior to the day of settlement.

I vote for challenging the property assessment as you initially included and as several others have emphasized. You'll learn a lot in the process that can be useful for all the properties you own now, or will own in the future. Even if you don't get a tax reduction you'll learn about comparable sales and how the assessor values your property and competing properties -- not a bad return!