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Property Valuations

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  • Property Valuations

    One of the major places most municipalities get fundage is property tax.

    Somebody from the tax assessor's office will establish a value for your property (I'm sure this varies by state) and apply the current tax rate to figure your property tax bill.

    You can, in many places, protest the valuation if you believe it's unreasonably high, and there are services that help you do that for a percentage of the savings. In many cases, if there are no savings, the service is free.

    There are basically two parts to this that allow municipalities to raise revenue. They can raise the tax RATE, or raise the valuations for each property.

    (Texas has no personal income tax, and our legislature has reduced business tax by 25%, with the goal of having ZERO business tax within 10 years)

    In my case, the valuation on my property seemed quite low. Somehow, I must have fallen through the cracks. I called the former tax assessor, who retired and formed his own tax advisory business, and he looked up my public records and agreed - "yes, you are flying so low under the radar - eventually they'll catch up and increase the valuation, but for now, I'd just be quiet".

    Well, this was the year. I just got my proposed valuation or 2015 and it is more than DOUBLE what it was last year. WAY more than double. The way this works, however, is that the taxing authority is not allowed to increase the property tax more than 10% over 3 years, so they "value the property" at more than DOUBLE, but then establish a taxable basis at only 10% more than the previous year's tax basis.

    With pension funds and other municipal obligations, many municipalities are looking for any place they can find money, and property taxes in many regions are soaring.

    Long story short, my situation turns out rosy for me -- I'm getting ready to sell and relocate, and one of the big questions a prospective buyer would have had was "why is the tax assessment so much lower than the property appraisal or the asking price". This way, they could see that, even though the tax assessment was high, the tax BILLING is really low.

    I'm just curious how this works in other parts of the country. (Or, I guess, other parts of the world)
    "Neighbor, how long has it been since you’ve had a big, thick, steaming bowl of Wolf Brand Chili?”

  • #2
    in Indiana they raise the property value but they keep it pretty fair and there is a homesteader discount if the property is your primary residence

    I paid $135k for my house in 2009 and I got a good deal (it started out at $145k but I made an offer and got it cheaper)
    currently the property value for taxing is set around $155k -but I get the discount too

    Comment


    • #3
      Originally posted by Sparko View Post
      in Indiana they raise the property value but they keep it pretty fair and there is a homesteader discount if the property is your primary residence
      I'm surprised how many people don't know about this exemption - and it's FREE and all you have to do is claim it!

      I paid $135k for my house in 2009 and I got a good deal (it started out at $145k but I made an offer and got it cheaper)
      currently the property value for taxing is set around $155k -but I get the discount too
      When I turn 65, my property taxes "freeze"... they cannot be increased.
      "Neighbor, how long has it been since you’ve had a big, thick, steaming bowl of Wolf Brand Chili?”

      Comment


      • #4
        Appraisers follow a certain formula so that their final result will be objective, not subjective. Any two unrelated appraisers should come within about 95% of each other. They look at frontage, depth of lot, size of house, condition of house, and compare it with the price of recently sold houses of comparable size and condition within the area.

        Municipalities aren't concerned with all that, as long as everybody's property is proportional. Maybe every ten years or so they will hire appraisers to do the entire township/borough/city to make sure they're still proportional. They'll tweak an old assessed value if improvements or made or-God forbid-a home is severely damaged or destroyed.

        I have had a home reassessed on a few occasions, and even though the assessed value has suddenly jumped after about ten years, the resultant yearly tax has slightly dropped.

        In New Jersey there is a limit on how much a municipal budget can increase annually. I think its 3%. They just take the entire assessed value of the entire township and divide the annual budget proportionally. It doesn't matter how outdated the assessed values are, as long as everybody's is proportional.

        Comment


        • #5
          Originally posted by Faber View Post
          Appraisers follow a certain formula so that their final result will be objective, not subjective.
          I think they try to do this, Faber (by the way, welcome to Tweb) but sometimes, as in my case, I may have fallen through the cracks, being a bit remote.

          Any two unrelated appraisers should come within about 95% of each other. They look at frontage, depth of lot, size of house, condition of house, and compare it with the price of recently sold houses of comparable size and condition within the area.
          Yes, so a "protest" would be based on a situation where, perhaps, the neighborhood is in decline, or a neighbor's house is causing a depression in the local market, etc...

          Municipalities aren't concerned with all that, as long as everybody's property is proportional. Maybe every ten years or so they will hire appraisers to do the entire township/borough/city to make sure they're still proportional. They'll tweak an old assessed value if improvements or made or-God forbid-a home is severely damaged or destroyed.

          I have had a home reassessed on a few occasions, and even though the assessed value has suddenly jumped after about ten years, the resultant yearly tax has slightly dropped.

          In New Jersey there is a limit on how much a municipal budget can increase annually. I think its 3%.
          Ours is 10% over 3 years... they can do it in 3 1/3 increments over 3 years, or all at once, but the aggregate increase over 3 years cannot exceed 10%.

          They just take the entire assessed value of the entire township and divide the annual budget proportionally. It doesn't matter how outdated the assessed values are, as long as everybody's is proportional.
          Good comments.
          "Neighbor, how long has it been since you’ve had a big, thick, steaming bowl of Wolf Brand Chili?”

          Comment


          • #6
            You have to pay to protest your evaluation if you live in the Municipality of Anchorage.
            Micah 6:8 He has told you, O man, what is good; and what does the LORD require of you but to do justice, and to love kindness, and to walk humbly with your God?

            Comment


            • #7
              Originally posted by Jedidiah View Post
              You have to pay to protest your evaluation if you live in the Municipality of Anchorage.
              how so?
              "Neighbor, how long has it been since you’ve had a big, thick, steaming bowl of Wolf Brand Chili?”

              Comment


              • #8
                There is a fee for contesting the amount evaluated. Too many of the evaluations challenged in years gone by were reduced because they were over valued originally. Now you must pay a fee to have your valuation reexamined.
                Micah 6:8 He has told you, O man, what is good; and what does the LORD require of you but to do justice, and to love kindness, and to walk humbly with your God?

                Comment


                • #9
                  Originally posted by Jedidiah View Post
                  There is a fee for contesting the amount evaluated. Too many of the evaluations challenged in years gone by were reduced because they were over valued originally. Now you must pay a fee to have your valuation reexamined.
                  Ah! I get it.

                  There are a number of agencies here that will take your case on a contingency basis, including paying that fee. They get 50% of any savings. If it involves a battle, that might be a good deal, since they have the know-how, time and expertise. However, sometimes it's just a matter of filing for the homestead exemption or some other minor thing that could easily be done by the homeowner, so giving 50% of the savings to somebody else doesn't make any sense.
                  "Neighbor, how long has it been since you’ve had a big, thick, steaming bowl of Wolf Brand Chili?”

                  Comment


                  • #10
                    Get in touch with Glenn Hegar, Comptroller of Public Accounts in Texas.

                    http://comptroller.texas.gov/taxinfo.../protests.html

                    Comment

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