Should I fight rise in property tax appraisal?

Discussion in 'Off-Topic' started by strantor, Jun 18, 2017.

  1. strantor

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    I'm a first time home owner and I have been here 2 years. I put a new workshop on the property and my appraisal value went up substantially (increase of about $50k).

    I missed the deadline to contest the raise. I'm looking for a silver lining and wondering if I should fight it next year.

    I'm thinking along these lines...
    As I understand, appraisal of other houses on your street affects your appraisal. I have that idea because one of the acceptable supporting documents to contest an appraisal increase is your neighbors' appraisals (to prove that your appraisal is way higher than similar houses around you). So if my appraisal went up that much this year then it might cause my neighbors appraisals to go up too this year or next year. And they won't have a leg to stand on when they contest, because mine went through and it's so much higher than theirs.

    Since house values are also seemingly affected by surrounding house values, If my appraisal hike starts a domino effect of rising appraisals at my end of the street, it could raise the value of my house.

    That's assuming that tax appraisal values are in any way linked to asking prices of houses. I'm not sure about that. I paid a lot more than what the county had appraised my house. The VA appraisal was more in line with what I paid.
     
  2. #12

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    Nov 30, 2010
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    It depends on your intent. I intend to stay here until I die, so I did all my improvements so you can't detect them from outside. I have the same, old, aluminum shed that was here when I bought the place. Nobody can tell by looking that it's a well insulated fabrication shop with 60 amp service and an air conditioner.

    If you showed the appraiser an empty shed with a rusty lawn mower in it, do you think it would appraise for $50,000?
     
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  3. JoeJester

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    Did it cost you 50k to put the shop in ... along with the driveway improvements?

    I'd appeal showing them the costs.
     
  4. Papabravo

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    As the cost of retiree healthcare and benefits is fast becoming the sole line item in municipal budgets you have to wonder about how to achieve a better balance for the services we require.
     
  5. Kermit2

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    Feb 5, 2010
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    Every tax is one time only. Buy merchandise. Pay tax on it once. Earn a pay check. Pay tax on it one time only.
    Get some property and pay this year and again next year and again and again and again.

    How is that right? They should call it a fee because it isn't like any tax I know of.
     
  6. #12

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    You are renting your home, long after it's paid for.
    Much like you rent the 2nd amendment with a concealed carry permit and I rent the right to work for a living with annual fees on my Contractors License.
     
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  7. spinnaker

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    That doesn't matter. It could have cost him $1K to put the building in and his property values could still have gone up $50K. By putting in the building and (I assume) getting the proper permits, Strantor made the "huge mistake" of calling attention to himself. So what happens is they look to see what other places are selling for in the area and file the appeal accordingly based on the value of newly sold comparables plus the value of the work room.

    But I suspect there is also something else going on here. Strantor mentions he has only been there 2 years. Assuming he bought for more than the accessed value, it might be that the tax man is just catching up with him now. That is my problem. I paid $189K for my home but it was assessed for $130K when I bought it. It has been several years since the last assessment so it was accessed far below what homes are selling for here.

    Because I paid far more than the accessed value my taxes are going to go up too. What sucks is if I challenge it, I can't use just any comparable in my challenge because they have not been accessed in years. I have to use recently sold as my examples and I think ones they decieded to appeal.

    There could be a home in my neighborhood that is larger, nicer and has far more property than mine and they are paying less in taxes than me because they have not been accessed in years PLUS they don't have the metric of a recent sale on that home.

    The system is extremely unfair. I would say unconstitutional under the equal protection clause. But it has been challenged in court. No idea how it was found constitutional but it was.

    What difference should it be what I paid for the house? That is what it is worth to me. Not necessarily anyone else.


    @strantor, check your local laws. I believe, some localities have laws that say they can only raise your taxes X percentage every X years.
    I feel your pain. I am struggling with making the decision to fight it or not. I think what I might do is to wait a year and see how bad it is.

    It should not cost you anything to fight it unless you want to hire an attorney. But the attorney won't do much for you you can't do on your own. What you need to do is get a list of all of the recently accessed comparables and or comparable +. All that information is public record but it might be easier if you have a friend that is a real estate agent because they tend ot have better tools for searching.
     
  8. spinnaker

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    Taxes on inheritance are paid twice if not many times.
     
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  9. GopherT

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    I love my county in PA.

    They count the number of bedrooms, toilets, squarefootage of the finished and unfinished areas of the home and aplly a formula.

    Then they set a county and school district budget. They co back and spread the burden over each homeowner per the formula.

    The best thing is that our county has been growing so no tax increase in 13 years.

    That statement usually gets people to ask where i live, and anogher person moves here to further the run of no tax increases.
     
  10. spinnaker

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    Exactly. You never really own your home but that is not the only reason real estate tax is horrible.

    1. There is simply no fair way to determine the value of a home. Recent sales can get you in the ballpark but they don't tell the whole story. I used to own a townhouse that was accessed far under my neighbors that had the same unit. If they can't get it right with exact matches how do they compare homes that are simply similar?

    2. Most localities don't do a full assessment often enough. Recent sales will have their assessment appealed by tax authorities so assessments become quickly out of wack with homes that have not changed owners in years.

    3. Lots of school districts get their funding through property taxes. So low income districts get crappy schools because of the reduced taxes collected. In addition low income people typically pay a higher percentage of their property value than their wealthy counterparts.

    4. Extremely unfair to the elderly that have to pay till they die. Many with no or little income coming in.

    5. It is discriminatory. Say someone lives in a crappy neighborhood. They get a small windfall of $200K - $300K which could buy a very nice home in my neighborhood (which is an excellent neighborhood, because I live here. :) ) . Unless that person has a decent income they can't afford to buy the house because they can't afford the taxes.

    6. You have zero incentive to fix your place up on the outside. Why should you when your taxes will go up?


    And don't get me started on income tax. The only fair taxes are sales, usage and services taxes.
     
    Last edited: Jun 18, 2017
  11. spinnaker

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    Butler County right? I heard millage was going up??

    Robinson Twp (where I live) is growing by leaps and bounds plus Robinson Mall (a huge mall) will start to pay taxes this year and the school district had a millage increase last year. Plus my taxes will be going up because I was stupid enough to buy a place. :eek:
     
  12. Papabravo

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    So what is the proper funding model for local government? Property tax is a stubborn idea because all the alternatives are worse. At least according to voters who are presented with alternatives.
     
  13. spinnaker

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    Sales, service and usage taxes are the only fair tax. The poor can be accommodated by not taxing essentials and/or tax back funding.
     
  14. strantor

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    Shop cost about $30k but it's on a separate lot. I own 3 lots side by side; one has my house on it, one was empty until I put the workshop on it, and the other has a kids jungle gym on it.

    They raised my house lot by $20k.
    They raised my workshop lot by $30k.
    They raised my jungle gym lot by $2k.

    For the house lot, they raised it to about what I paid. So would be hard to argue that based on price paid.

    For the workshop lot they raised it by about what I paid for the workshop.

    So I think submitting receipts would only hurt me and strengthen their arguments. I think I would have to argue based on similar nearby properties. Everyone on my street has appraisals much lower than mine, and many are much larger homes and nicer homes. I don't know if they care about (lack of) improvements, but my house could use a new roof and new siding. That's probably $30k worth of work to get it up to the value they appraised it at.
     
  15. GopherT

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    They raised it by what you paid in supplies (lumber concrete, etc) to build it yourself or to have someone else buy all the supplies and build it for you.

    I would say, from a marketing person's view that your home now has access to a 20k shed, that makes the house worth at least 20k, especially to you since you made the decision to build the shed. Then, the lot with the shed has a $20k asset on it that it didnt have before so that is worth $20k more :D
     
  16. ronv

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    I think they gotcha. :(
     
  17. Papabravo

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    They may be fair but they are universally despised by voters at the polls. When you call the cops, or the fire department, or 911 what should the bill be? What would you pay to have your garbage hauled away? Are you really ready for user fees? The first time you got hit for the actual cost of one of these "public" services you'd be screaming your head off!

    Just as a Gedankenexperiment, what kind of "public service" fee would you be willing to pay "in lieu" of property taxes? If you say zero, that's the wrong answer, and it reveals you for a sponge.

    The city I live near in Florida has a population of 1,732 and a budget of 6.3 M$ making each resident's annual share about $3575.00 That is about 27% more than the property tax I pay. I guess I'd rather pay the property tax. We should all be careful what we wish for -- we might just come to regret it.
     
    Last edited: Jun 18, 2017
  18. JohnInTX

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    Jun 26, 2012
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    We recently moved to Houston from Dallas but when in Dallas County, we routinely contested the assessed values and usually got some reduction in them. It was a simple process (in Dallas anyway). Here are our experiences:

    File the protest form on the Notice of Assessed value when you receive it.
    You'll get a hearing date.
    Go down to the tax office, meet one on one with an assessor and make your case.
    The assessor will adjust down if he/she agrees.
    Repeat each year that assessments change. Dallas Co. got to doing a blanket increase of all values each cycle. Those were easy to contest.

    To make your case on the basic value, use Zillow, Trulia or a friendly realtor to run comps and see what comparable properties have sold (not listed) for in the last 3-6mo. Figure out the $/sq. ft. and see how they compare with your property. If they are less than your assessed value, you have something to work with.

    We found that permitted additions added to the assessed value on a 1:1 basis i.e. add $2000 fence and see the value go up 2K. That's another avenue for reduction and something to consider for your addition - you may have spent $50K on it but does it really add $50K to the value? Usually it does not. Zillow et al will offer suggestions for additions/remodels to raise the value for sales purposes. They rarely yield a 1:1 return. Discounting your workshop would fit into that category, I would think.

    Condition and necessary repairs are variables. Generally, normal wear and tear doesn't usually count but we argued the old pool equipment with a big replacement value, old roof etc. to reduce the assessed value. Make a list like you were considering buying the property. What would you discount the list price for? Take lots of pictures of the bad stuff and bring them along.

    The typical reduction after an assessed value increase ran from 2-5%.

    So far in Harris county, we have found the tax office competent and responsive. Our hooch is new construction so we pretty much have set the value for this year but will protest next time around if the numbers work. Harris county is also unsympathetic to paperwork errors even though they are not your fault as we found out so how easy it is to get anything via the protest route remains to be seen.

    There are outfits that will make your case for you in return for a (big) chunk of any tax reductions. We investigated that route but elected to do it ourselves. Keep an eye out, though. We just got notice from Harris county that some outfit had filed a protest on 'our behalf'. We had to notify the county that we had not authorized that. Apparently, that happens a lot here. Also, some outfits that people contracted with did not do their job - one is repaying 800K in penalties so watch out for that.

    Be sure to visit the Harris County Tax website from time to time to see what is happening with your property. We, as well as 2 neighbors who closed about the same time, got hit with penalties when the title co. did not get the addresses updated with the county. The bills went to the builder who apparently tossed them.

    Maybe we can compare notes next year when the new Houston assements come out.

    Good luck!

    EDIT: a quick search on the Houston Chronicle pulled these:
    http://www.chron.com/news/article/Property-tax-appeals-can-result-in-significant-11176045.php
    http://www.chron.com/news/article/On-the-move-Understanding-property-taxes-in-11057781.php

    EDIT2: The proper term is this context is assessment, not appraisal as pointed out below. Post edited.
     
    Last edited: Jun 18, 2017
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  19. spinnaker

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    I never said anything about charging for police, fire etc. What I mean by "services" was utilities, grass cutting, haircut, car wash etc. etc. etc.
     
  20. spinnaker

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    @JohnInTX at least here appraised value and accessed value are two entirely different things. And likely two different values. An appraised is what you get when you want to get a loan. The government does an assessment to determine the value of the property.

    A technicality but you want to be certain you know what you are talking about if you plan to contest the assessment appeal. The appraised value is likely to be much higher than the accessed value so you certainly do not want to use the appraised value in your argument.
     
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