Property tax assessments

[Carson Dyle]

My folks live in a county where property tax reassessments haven't been done since 1974. Needless to say, in that time the millage rate has increased due to increases levied by the school district, the county and the town.

So what happens if/when a new county-wide assessment is done? Say the assessor says your $40,000 1974 assessment is now $120,000 in 2014. Certainly, their property taxes don't increase by a factor of three. Do they also have to adjust the millage when this happens?

Or do they fudge all of the assessed values and not use real-world numbers? Do they just say your assessment is now $30,500 (or similar).

 

[OCGuy]

In California you are generally only re-assessed when there is an ownership change to the deed. Meaning when you purchase the home, and then for instance you get divorced and refinance and remove the ex-wife.

there is actually a law that lets you transfer your old property tax rate to a new home as long as the new home is not x% higher in value.

One of the only things this deep blue state does correct with taxes.

If you are ever re-assessed and dont agree with the land + improvement value, shell out the $350 for an appraisal and send it to the assessor

 

[fstime]

Property assessments mean zero.

Whether values skyrocket, or plummet, the city will simply adjust their mill rate to whatever it needs to be set to in order for them to bring in the amount of revenue they need. They get their money no matter what the real estate market does.

In my state, state law says all cities need to perform reassessments every 4 years. I'm sure almost everyone's assessment went down following the 2008 housing bubble crash, but taxes most likely stayed the same or increased.

It also seems almost impossible for property taxes to ever stop increasing. Most of the budget goes towards the school systems, which pay unionized teachers who are always get a modest raise every year. Same to be said for police officers, firemen, etc.

 

[Drako]

In California you are generally only re-assessed when there is an ownership change to the deed. Meaning when you purchase the home, and then for instance you get divorced and refinance and remove the ex-wife.

there is actually a law that lets you transfer your old property tax rate to a new home as long as the new home is not x% higher in value.

One of the only things this deep blue state does correct with taxes.

Thanks to prop 13, one of the only good things that Jerry Brown brought to California

 

[Carson Dyle]

In California you are generally only re-assessed when there is an ownership change to the deed. Meaning when you purchase the home, and then for instance you get divorced and refinance and remove the ex-wife.

So, are real-world property values used in the re-assessment? Say someone bought a home in 1960 for $15,000, and in 2013 paid $n in property taxes. The property changes hands in 2014 and is sold for $300,000 and is re-assessed. Does the new owner pay _twenty_ times the property taxes as the previous owner?

 

[OCGuy]

So, are real-world property values used in the re-assessment? Say someone bought a home in 1960 for $15,000, and in 2013 paid $n in property taxes. The property changes hands in 2014 and is sold for $300,000 and is re-assessed. Does the new owner pay _twenty_ times the property taxes as the previous owner?

Yep. Assessed value minus any exemptions multiplied by the tax rate for the parcel.

 

[Carson Dyle]

Do improvements to a property also trigger a reassessment? Say you add a room to the house, or a business erects a new building on an commercial property.

 

[Drako]

Do improvements to a property also trigger a reassessment? Say you add a room to the house, or a business erects a new building on an commercial property.

If you do them legally with permits. :sneaky:

 

[OCGuy]

Do improvements to a property also trigger a reassessment? Say you add a room to the house, or a business erects a new building on an commercial property.

Yes because the new room count/square footage will trigger a change.

 

[NoTine42]

So, are real-world property values used in the re-assessment? Say someone bought a home in 1960 for $15,000, and in 2013 paid $n in property taxes. The property changes hands in 2014 and is sold for $300,000 and is re-assessed. Does the new owner pay _twenty_ times the property taxes as the previous owner?

It may vary by state, but around here the tax assessor told me:
The county finalizes their budget. Their budget divided by the tax rate = the total county's assessed value.
(I split off a new lot from my land, and the assessor could not tell me its appx value until he got the budget from the county that fall)

The assessor is basically determining what %of the total you are worth. If you go up, then someone else goes down (or someone increases less). Magically, my assessed value seems to go up 3% a year.

 

[boomerang]

Property assessments mean zero.

Whether values skyrocket, or plummet, the city will simply adjust their mill rate to whatever it needs to be set to in order for them to bring in the amount of revenue they need. They get their money no matter what the real estate market does.

What?!

 

[mrrman]

"Property assessments mean zero"

Its just another way to get more $$$ out of you. I would never sell my house for the assessed value. Its worth twice that much.

 

[HardcoreRobot]

Property assessments mean zero.

Whether values skyrocket, or plummet, the city will simply adjust their mill rate to whatever it needs to be set to in order for them to bring in the amount of revenue they need. They get their money no matter what the real estate market does.

In my state, state law says all cities need to perform reassessments every 4 years. I'm sure almost everyone's assessment went down following the 2008 housing bubble crash, but taxes most likely stayed the same or increased.

It also seems almost impossible for property taxes to ever stop increasing. Most of the budget goes towards the school systems, which pay unionized teachers who are always get a modest raise every year. Same to be said for police officers, firemen, etc.

yup, this has been my experience too.

and DONT confuse assessment with appraisal, those are actually done by professionals specifically for RE market uses (not taxation usage)

 

[skimple]

It may vary by state, but around here the tax assessor told me:
The county finalizes their budget. Their budget divided by the tax rate = the total county's assessed value.

This. The current "tax rate per $1000 of assessed value" is commonly used. If they are going to reassess to be more in line with appraisal value, what will likely happen is that the "tax rate per $1000 of assessed value" will be changed so that it all works out to whatever the budget is.

This is a commonly used "trick" to shift tax burden. Wealthier neighborhoods typically get higher increases in their assessments due to perceived increases in property values. So even though the total tax levy may only go up 3%, a reassessment can cause certain properties to experience a much larger percentage increase in taxes. The flip side is that those properties that have not gone up (in assessment value) see no tax increase.

In theory, this is a reasonable system. But as other people have stated, the problem is that "assessments" and "appraisals" rarely agree. But most municipalities rely on the fact that people are too lazy to challenge the assessment.

Whatever their new assessed value is, pay for a formal, written appraisal. It will be worth it in the long run. Also, make sure that you check public records to see what the taxes are on the surrounding properties. Too many people don't bother.

I have been in my house for 17 years and have challenged three different reassessments. As a result, the difference between my appraised value and assessed value is "only" $10K. If I hadn't challenged it, it would be a difference of over $30K.

The house next door to mine is appraised at $20K less than my house, but assessed at $10K over mine.

 

[RearAdmiral]

I purchased a foreclosure in PA in Oct. '13. The home was $105k less than the previous buyer paid for it, yet the assessment is of course the same. Where I live we get total improvements / 2 for millage purposes. I am at $67,700. I'm hoping I can reassess this year and get it lower considering how much less I got the house for. My appraisal as part of the foreclosure process came in at exactly my purchase price...cough. I found that a little too obvious but whatever.

 

[monkeydelmagico]

My folks live in a county where property tax reassessments haven't been done since 1974. Needless to say, in that time the millage rate has increased due to increases levied by the school district, the county and the town.

So what happens if/when a new county-wide assessment is done? Say the assessor says your $40,000 1974 assessment is now $120,000 in 2014. Certainly, their property taxes don't increase by a factor of three. Do they also have to adjust the millage when this happens?

Or do they fudge all of the assessed values and not use real-world numbers? Do they just say your assessment is now $30,500 (or similar).

Posters are confusing your question regarding a county wide re-assessment with individual situations. In the case of a county re-assessment you should expect the assessors to utilize current and fair market values to create their assessments. Considering the last assessment was done nearly 30 years ago the assessed values are certain to increase substantially. Before you panic realize the county/townships have a relatively fixed budget so the effective tax rate will probably go down.

Skimples advice regarding an individual assessment is good or you can use market values from Trulia or other sites to get an idea of how much the property should be assessed for.

 

[MustISO]

They redo our assessments about every two years. Amazingly our property taxes dropped a little from a high of $6200 in 2011.

 

[brianmanahan]

what kind of county doesnt do an assessment for 40 years??

counties in ohio do it every year like clockwork

 

[thegimp03]

One of my friends owns an old house in the Bay Area that he and his wife bought back in ~2009. He pays about 8,500 a year in property taxes. A neighbor down the street has a nearly identical-sized house and has owned the house since it was built in the mid 1940s but only pays a few hundred per year. Bad for him, good for the neighbor.

 

[Meghan54]

They redo our assessments about every two years. Amazingly our property taxes dropped a little from a high of $6200 in 2011.

And here I was bitching about the $500 property tax we had to pay for 2013. Thank goodness we'll be in the house a year by next tax time and get the homestead exemption, which should effectively halve that figure.

 

[skimple]

One of my friends owns an old house in the Bay Area that he and his wife bought back in ~2009. He pays about 8,500 a year in property taxes. A neighbor down the street has a nearly identical-sized house and has owned the house since it was built in the mid 1940s but only pays a few hundred per year. Bad for him, good for the neighbor.

Ha! I pay over $8K and I am nowhere near a Bay of any kind.

New York State for the loss.

 

[Greenman]

Thanks to prop 13, one of the only good things that Jerry Brown brought to California

Jerry Brown?

I think you mean Jarvis Gan.

 

[highland145]

And here I was bitching about the $500 property tax we had to pay for 2013. Thank goodness we'll be in the house a year by next tax time and get the homestead exemption, which should effectively halve that figure.

And most of our school taxes is on the vehicles. My 2010 Tacoma tax was more than county/city for the house.