2014 tax appraisal value

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
mrsevansc
Posts: 67
Joined: Wed Feb 06, 2013 6:31 pm

2014 tax appraisal value

Post by mrsevansc » Sun Apr 06, 2014 3:08 pm

Hello Bogleheads,
I hope someone here can help me answer this question.
We purchased a home in 2013 for 2% more than the 2013 tax appraisal. This year, our tax appraisal increased by 8%. I called the number and they lowered it down to our purchase price and sent me a waiver. Is this the lowest it will go?
Thank you

User avatar
rustymutt
Posts: 3721
Joined: Sat Mar 07, 2009 12:03 pm
Location: Oklahoma

Re: 2014 tax appraisal value

Post by rustymutt » Sun Apr 06, 2014 3:14 pm

Most counties in most states will let you appeal your taxes if you feel they've made an error in judgement as to it's value.
Be careful, they can raise your taxes directly from such appeals. Have your argument to heart, and show them some kind of proof of your stand. In my cases I've had listed government values for other homes of similar size and type. I'm 2 for 3 and might go 3 for 3, as I'm waiting for a reply to an appeal this year.

Good luck with it
I'm amazed at the wealth of Knowledge others gather, and share over a lifetime of learning. The mind is truly unique. It's nice when we use it!

livesoft
Posts: 60936
Joined: Thu Mar 01, 2007 8:00 pm

Re: 2014 tax appraisal value

Post by livesoft » Sun Apr 06, 2014 3:17 pm

There are a few threads on appealing the amount of one's property taxes.
Example: http://www.bogleheads.org/forum/viewtop ... =2&t=96495

The lowest it will go? Maybe this year, but it could go lower in the future. Suppose the real estate market crashes and your home loses 50% or 80% of its value. If that happens, I am pretty sure you can get lower taxes.
Wiki This signature message sponsored by sscritic: Learn to fish.

basspond
Posts: 1007
Joined: Wed Nov 27, 2013 4:01 am

Re: 2014 tax appraisal value

Post by basspond » Sun Apr 06, 2014 3:24 pm

Probably for this year. However, most counties have online tax appraisal records you can investigate what your neighbor's values are. If they are comparable then you might not be able to go lower. There are also companies that will protest your valuation and charge you half of your savings (if they get any) on the first year.

mrsevansc
Posts: 67
Joined: Wed Feb 06, 2013 6:31 pm

Re: 2014 tax appraisal value

Post by mrsevansc » Sun Apr 06, 2014 3:31 pm

Thank you. Perhaps I should have included more information.
The private appraisal we got when we purchased the house was higher than what we paid but I have my doubts about its validity since the appraiser has everything to gain and nothing to lose by giving an inflated value. I may be wrong here since this is my first and only real estate purchase.
The county provides comps but we bought an older house in a new neighborhood so I don't think the comps make a fair comparison.
I'm not sure what my argument would be if I were to appeal but maybe you can give me ideas. Zillow's value is lower than our purchase price. Also, USAA has a home valuation tool that also comes up lower than our purchase price.
And yes, my question refers to the 2014 tax appraisal only.

livesoft
Posts: 60936
Joined: Thu Mar 01, 2007 8:00 pm

Re: 2014 tax appraisal value

Post by livesoft » Sun Apr 06, 2014 3:41 pm

Clearly, the best value of your home is what somebody paid for it recently. No other comps are necessary. It seems that the property was recently sold and whatever price the person paid for it is best estimate of its true value.

Oh, you paid for the house. Your purchase price is the best estimate for the home's value. If you had paid less, that would have been a better indicator of the home's value, but you didn't pay less. If you had paid more, that would have been a better indicator of the home's value, but you didn't pay more.
Last edited by livesoft on Sun Apr 06, 2014 3:43 pm, edited 1 time in total.
Wiki This signature message sponsored by sscritic: Learn to fish.

User avatar
TomatoTomahto
Posts: 7288
Joined: Mon Apr 11, 2011 1:48 pm

Re: 2014 tax appraisal value

Post by TomatoTomahto » Sun Apr 06, 2014 3:41 pm

I guess the town would ask why you're trying to prove it's worth appreciably less than you recently paid for it.

Eta: cross posted with Livesoft's same basic idea.

mrsevansc
Posts: 67
Joined: Wed Feb 06, 2013 6:31 pm

Re: 2014 tax appraisal value

Post by mrsevansc » Sun Apr 06, 2014 3:47 pm

Those are very good points and I completely agree.
I suppose I second-guess myself too much. It bugs me that Zillow and USAA say that it's worth less.

livesoft
Posts: 60936
Joined: Thu Mar 01, 2007 8:00 pm

Re: 2014 tax appraisal value

Post by livesoft » Sun Apr 06, 2014 3:49 pm

OK, read the other threads on appealing one's property taxes. If you can prove that you got ripped off and paid too much for your home, then I am sure they will lower your property taxes.
Wiki This signature message sponsored by sscritic: Learn to fish.

pshonore
Posts: 6327
Joined: Sun Jun 28, 2009 2:21 pm

Re: 2014 tax appraisal value

Post by pshonore » Sun Apr 06, 2014 3:57 pm

In the town I live in (and in most of Connecticut) , the philosphy is your appraisal is relative to all the other houses. Lets say we have a street with 20 - 3 bedroom, 2 1/2 bath colonials, all valued at $400K +/- (fairly common situation). 2008 happens again and the house prices drop by 20%. Someone sells and the buyer pays $320K. There is no way the assessor will drop the value of his house unless he reassesses the rest of the houses on the street (and in the entire town). The same logic is used when new construction is built - it is assessed using building values and costs when the last re-appraisal was done. If people are living in almost identical houses, they should be paying the same tax.

User avatar
FrugalInvestor
Posts: 4713
Joined: Fri Nov 07, 2008 12:20 am

Re: 2014 tax appraisal value

Post by FrugalInvestor » Sun Apr 06, 2014 4:01 pm

I have successfully appealed my assessed value more than once, in different locations.

If your taxing authority assesses to market value which most do, then you need comparable home values (comps) to justify your appeal. Tax records are not the best as (you have already shown) they may or may not be correct. To get comparable market values you need to look at recent home sales in your area for houses as similar as possible to yours in size, age, condition, number and types of rooms, lot type, etc. with adjustments for any significant differences. The more recent the sale the better. You can get this information from public records (typically online nowadays) and from online real estate sites like Zillow, Redfin and Trulia (all may not have good info. for your area). Look at the appraisal done for the purchase you just made. Ideally you would use a similar format with comps you feel are more appropriate. This is what I've done when the appeal process if very formal, otherwise I've used the same basic information but presented it in a less structured manner.

Some jurisdictions have very informal processes, perhaps just a phone call, and others have more formal ones like hearings in front of appeal panels or boards. I've done both and have always won because I went in with information that was objective and nearly irrefutable.

As to your question about whether your valuation could go down further. If you accepted the new value then I doubt it could go down any further until the next re-assessment cycle (not all jurisdictions re-assess every year but most do). At that time your value could drop if the overall housing market in your area dropped, or could go up if it goes up, or it could change due to improvement to the property (that they become aware of through permits, observations, etc.). It's more likely to slowly rise with time due to inflation of values over time.

Keep in mind that the best evidence of home values are actual sales of comparable homes, the more similar and recent the better, and there should be adjustments for any significant differences.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

rogermexico
Posts: 161
Joined: Tue Jan 08, 2008 5:58 pm

Re: 2014 tax appraisal value

Post by rogermexico » Mon Apr 07, 2014 12:24 pm

Also know that you need to compare your home with recent listing and sales (market), and not really obsess over the assessed values of your neighbors.
If your neighbor with a home identical to yours is assessed below market value (and your's is not), that's typically not going to help you get your assessment lowered. They'll compare yours with market value and say tough luck if the neighbor gets a break.

User avatar
FrugalInvestor
Posts: 4713
Joined: Fri Nov 07, 2008 12:20 am

Re: 2014 tax appraisal value

Post by FrugalInvestor » Mon Apr 07, 2014 12:57 pm

rogermexico wrote:Also know that you need to compare your home with recent listing and sales (market), and not really obsess over the assessed values of your neighbors.
It is actual sale prices that count, not listing prices. I can list my house for anything I want but it's what someone is actually willing to (and does in fact) pay for it that determines market price. Most assessments are statutorily made at market.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

Post Reply