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Tax assessment went down 10% - need advice

7K views 35 replies 10 participants last post by  jerryh3 
#1 · (Edited)
I purchased a foreclosed duplex on 4/25/2008

It was originally listed at 170k, but I ended up purchasing it for 135k. The 2008 tax assessed value was 165k. I just got a notice of a assessment change down to 148k. A drop of 17k. Over the last year, I've completly gutted and renovated both kitchens and renovated them with premium materials. I've also done the same with one bedroom and 1 bath. I've also done a fair amount of work on the outside. I am also in the process of having a new roof, gutters, and fiber cement siding put on. If I plan on selling sometime in 2009 or 2010, would it be best if I object to the new value and had the assessor actually come out to value the property?
 
#5 ·
The point is to keep the assessed value the same (165k) so that the sale price "can" be around that value instead of having to go over current value.

I pulled permits for most of the work. Not too much of the remodeling required permits for my area besides the wiring.
 
#6 ·
=vetting;265755]The point is to keep the assessed value the same (165k) so that the sale price "can" be around that value instead of having to go over current value.
you make the sale price whatever you want to agree to (as long as you can find a buyer willing to pay and a bank willing to loan, if needed).

Maybe I'm missing your point in all of this.

assessments are not binding to anybody except the assessor for taxation (and even that can be argued). When a bank loans money, they will require an appraisal. What the current assessment is has no bearing on the appraised value.

btw: the assessed value should have dropped to the purchase price ($135k) since an assessment is supposed to represent market value and if all the building could be sold for was 135, then the market value is 135 but due to the improvements, I would suspect it will increase drastically the next tax billing (that is one thing the permits do; alert the assessor to changes).

If you want, and believe the value to be greater, then call the assessor to reassess. It most likely will be greater than the $148 (based on what you have posted and presuming you did not over pay radically)
 
#7 ·
There is no correlation in the assessed value the local government places on the house and the price you sell it at. As a matter of fact, it's better if the assessed value is substantially reduced so the new homeowner doesn't see a large tax bill with the for sale sign.
The figure that is important is the appraised value, which indicates the homes value at the time of the appraisal.
That's the way it works on LI in NY.
Ron
 
#8 ·
I've never asked to pay more taxes
Selling is a matter of appraised value
If the appraisal comes in low, you will have a hard time selling
If other houses in your area are selling for less, then your house value has decreased

They will be happy to raise your taxes
It will not mean your house is worth more
 
#9 ·
We had a private appraiser appraise our house this fall for our re-finance - the appraised value went up 25K (not bad in a down market - and proof that I am actually getting something positive done). The private appraiser only had to report to us and our mortgage company.

At the same time, we protested our tax assessment because they over estimated the square footage of our house (long story). So our tax assessment actually went down.

At some point the city or county may do another assessment, but until then....:whistling2:
 
#10 ·
I'd just sit back and enjoy the low tax bill. I don't think that real estate agents, appraisers and buyers put much of any stake in the county's valuation of a home. The true value will be set by an actual appraisal, not a drive-by appraisal like the county does.
 
#11 ·
I'd just sit back and enjoy the low tax bill. I don't think that real estate agents, appraisers and buyers put much of any stake in the county's valuation of a home. The true value will be set by an actual appraisal, not a drive-by appraisal like the county does.
This is true, I use to be an appraiser/realtor. Enjoy the lower taxes. :)
 
#22 ·
i don't understand why you want to increase your taxes?

if i were a buyer, i would be happier knowing my city taxes are LOWER than my neighbours rather than higher. the actual value of the house is determined during the negotiation of the house purchase and has nothing to do with your taxes!

Knucklez
 
#24 ·
in todays market, there a lots of houses that are assessed at a much higher value than the sales value. Dang, I know a guy that bought a house that used to be valued over $200k for less than $100k. If he bailed because of what you did, he would not have the house, which when the market settles, will be back up near the $200k value.

with the banking debacle, there are thousands of houses that are being dumped at far below assessed value. They are then due for a reassessment at the lower level, or at an accurately appraised value actually.
 
#26 ·
and that is exactly why the assessed value has no real part in determining the value of a property. It often takes a recent sale, some sort of permitted improvement, or a protestation of the value for the assessed value to change beyond a standard cost of living adjustment.

Generally speaking, the assessed value is incorrect as to appraised value. Since it does not take true market value in to account, once it is established, it is most often simply the last sale value adjusted for the cost of living.

Very undependable.

But if a person looks at 2 houses, and one has an lower appraised tax rate, guess which one will be likely to sell 1st?
actually, I have had situations where it may have been this way but just as often it was exactly the opposite but most generally it is ignored. The assessed value is irrelevant when you are looking at 2 houses with the same selling price. Once they are sold, if at the same price, they will both have the same level of taxes, if they are subject to the same assessments.


And that is EXACTLY my point - why not buy a house with a LOWER tax assessed value?
The Value will go up, why pay more taxes then you have to?
Sure. They will go up as soon as the sale is registered. The taxable value will be determined by the selling price of the house, not what it was assessed prior to the sale.
 
#27 ·
actually, I have had situations where it may have been this way but just as often it was exactly the opposite but most generally it is ignored. The assessed value is irrelevant when you are looking at 2 houses with the same selling price. Once they are sold, if at the same price, they will both have the same level of taxes, if they are subject to the same assessments.

Sure. They will go up as soon as the sale is registered. The taxable value will be determined by the selling price of the house, not what it was assessed prior to the sale.
No, the TAX assesed value is NOT the SOLD price. The Tax assessment is NOT automatically raised to the selling price
NOR is it automatically REDUCED
Not around here, never has been
 
#29 ·
Not here, there isn't any automatic adjustment
Nor is there any cap on tax value increase
I bought my last house for $23,600, other houses were selling for $150k
So if only a 5% increase were allowed the Tax value would never become anywhere close to the value of the house
 
#30 ·
In MICHIGAN there is. I will have to research your state. In either case, the OP has not provided his state so I cannot determine if your or my situation would be applicable.

and just because OTHER houses were selling for $150k does not mean your house was worth $150k. I have no idea as to the value of your house. It may have been worth the $23.6k. Again, in MICHIGAN, when you apply for permits to make improvements, the assessor adjusts for the improvements so unless the work was done illegally or you left it as a POS, the that taxable value would increase faster than the cost of living or 5%.
 
#31 ·
It needed the yard cleaned out & painting
It was a short sale to avoid foreclosure
The bank agreed to let the owners sell it for less then the value
I cleaned it up & I sold the house for $200k
The extra was due to a new Septic system
I installed 3 new doors & 3 new windows, new roof
Other houses were selling for $150k that were cleaned up
A house 3 houses away sold for $320k
 
#32 ·
In MN the taxes rarely go down. My daughter and son-in-law purchased a home for $250,000 a year and a half ago. The previous sold price was $450,000, assessed value $375,000. The assessed value stayed the same this year at $375,000 even though they purchased the home just a year earlier for $250,000.

If they wanted to fight the assessed value they would have to have an appraisal done at the cost of $450 to show the county taxing authority. This has to be done within a short period of time after you are notified of your next years taxes. If they jumped the taxes up the year after that it would have to be done all over again.
 
#34 ·
but they could have caused it to go down. And, just as with Dave, I have not researched your states tax laws at all so I cannot really speak to yours, specifically. If it is possible for the assessor to reassess to an unreasonable amount, which you would have to contest, again, why do you not initiate a referendum on tax increase limitations such as we have in Michigan. It would help avoid such situations.
 
#33 ·
your tax code is fairly unique, at least compared to anything to the west of you. It does appear there is a tax cap of some 2 1/2% increase. I did not read enough to speak intelligently on the application or calculation so I won't try.

and again, taxable value is a unique determination. It is influenced by properties close but it is still an individual assessment.

example;\
not far down the road from me, a house was listed at $40k. Almost directly across the road, there is a house listed around $400k and less than 1/4 mile from there, houses are valued at $400k to $1m and less than 1/2 mile from there, houses are $750k and up.

So, does that mean the $40k house is underpriced? Not at all. I do not believe I would give the $40k for it.

Proximity influences values but it does not determine specific values.
 
#35 ·
All the houses were about the same
The $320k one was updated
But I think it would be an unfair Tax basis for someone to purchase like I did & pay an extremely lower tax
I just needed to clean the place up - EXTERMINATOR!!!
I didn't like the thousands of house guests :eek:

I could have lived in the house as is with just minor interior improvements (actually I did). The Septic was only installed a few months before I sold it - as was the roof

Lots of banks are now selling properties for the $$ owed
A $240k house sold for the mortgage owed - $132k
Many others have sold for less
To be automatically devalued for Tax purposes would take a toll on Towns income. Plus unfair to neighbors as Tax basis should be approximately "even" for everyone
 
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