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Dutchess_III's avatar

Can you explain the county tax appraisal on my house?

Asked by Dutchess_III (42473points) February 23rd, 2016

In Realtor’s school recently they gave an example of a house apprising for tax purposes for far less than it was actually worth on the market.

I asked the instructor what it means when the house appraises, for tax purposes, for more than it’s market value. She said that would never happen. That caused my brain to trip because I KNOW they’ve always taxed it above its market value.

Or….maybe I misunderstood what she was talking about. Today I called the tax office. They said for their purposes the house appraised at $87,690.
However, my house’s market value was recently (in the last two weeks) appraised at $82,000. I paid $75,000 for it in 1998.

What am I missing? Should I look further into this? What should I do next?

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9 Answers

zenvelo's avatar

This is one of those subjects where the individual state laws differ.

In California, there is a whole process where one submits evidence of recent comparable sales to demonstrate the house is less than its appraised value, and the assessor lowers the assessment. If the assessor does not agree, there is an appeals process.

If I were in your position, I would call the assessor’s office and ask what the steps are to challenge the assessment.

LuckyGuy's avatar

In my area they value homes at “full value assessment” – meaning what you can expect comparable houses to sell for. The prices are usually pretty close.
I had a discussion about this with other neighbors and we all felt they were about right.
Since you already had your house recently appraised you might want to call about it. Otherwise the cost of fighting and arguing might not be worth the effort. Before you decide to argue, figure out how much of a difference it would make on your tax bill. If it is a small difference and you are planning to sell it within a few years you might find it handy to have the higher number. That could be a good starting point for a listing.

Dutchess_III's avatar

Well, which would it be then? The market value of $82,000 or the tax value of $87,000? I mean, how would you work that?

LuckyGuy's avatar

If I were selling my house soon I’d start with the $87k.
If I were going to keep it a long time I’d figure out how much I’d save by reducing it to $82 . If the difference was below $30 per year I wouldn’t bother.

I’d also check trulia and zillow and see what they estimate.

Dutchess_III's avatar

Zillow is SO far off and inaccurate it’s not even funny!

Actually, hoping to get it on the market in the next year or so.

Cruiser's avatar

At least here is my county the assessed value is determined by the average of comparable homes that have sold the previous 2 years. When I bought my home in 2011 because of the market crash I bought it at 35% below it’s previous market value but when I got my first tax bill it still reflected the 2009–2010 sale prices which were 30%-35% higher before the crash. I bought at the bottom of the real estate market crash and so for the next 2 years I went to the county tax assessors and successfully fought for reductions in my tax bill as the home sales began to reflect this 30–35% drop in market value.

JLeslie's avatar

If the tax appraiser appraised your house for more than market value you should appeal it. This should never be the case. The last year I was in my TN house this happened to me and I was going to appeal, but then we found out we were moving. I had been appraised way below market for a few years, so I wasn’t very upset. In that part of TN they just reappraise every 3 years or so, they didn’t do it when I bought the place. Usually, a sales triggers a new appraisal.

In FL I know the tax appraisers always shoot a little low for house value. It’s probably not worth dealing with appeals or if the market dips a little to go as high as possible.

Usually, there is an appeals process readily available to property owners. It might be as easy as going to the tax appraisers website and clicking on the appeals icon and filling out the form.

CWOTUS's avatar

Are you certain that you understand the difference between “appraised value” and “assessed value”? They probably aren’t the same.

The “appraisal” is a (presumably) professional appraiser’s estimate of the land, buildings and other permanent property at the address in question. The “assessed value” is a (generally) lower value that the tax assessor has assigned on which the property tax is computed.

The appraisal should be within shouting distance of the actual market value for the property. The assessment is generally going to be considerably below this value (a lot of localities have rules that assessments are “70 – 80% of the appraisal”, which helps to preclude some of the fighting that gets started when people think that their property is taxed at too high a rate). Frequently, especially at sudden market changes, as @Cruiser has noted, the values get out of whack for a while (or in the case of changes that happen in the area, à la Love Canal area in New York state), pretty much for good, and it can take a while for the assessors to catch up to that fact. (They don’t have incentive to reduce assessments and lower tax collection!)

Dutchess_III's avatar

Yes, I understand the difference, @CWOTUS. Thanks.

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