I think a lot of people should appeal their property tax assessments
Posted by Mike Sylvester - 7/23/09 @ 8:44 am - Filed Under Featured, Local Politics, State Politics
I am not an expert on property assessments by any means; however, this post illustrates how I think assessments work based on my research to date. I am not an assessor!
I feel that it is very important that those with over-assessed properties file an appeal and ensure that their property values are lowered to actual values. I think this is easiest shown with an example.
Lets say that Tom lives in the Fort Wayne City limits in Perry Township (Like I do). Lets say his sister (Mary) lives just down the street from Tom in an identical house (There are many additions where many of the houses are identical). Lets say this year both houses were assessed at $220,000. Lets say that due to the housing market both owners feel that an appraisal would show their house was worth $200,000 as of 12/31/08. In this scenario both homeowners would pay $3060 in annual property taxes in 2009 payable for 2008.
Lets say Mary decides to appeal her assessment while Tom elects not to. Lets say Mary spends $300 to hire an appraiser to give her a written appraisal of her home value. Lets say that appraisal comes in at $200,000 and that the Assessor lowers Mary’s assessed value to $200,000. This means that in 2009 payable for 2008 Mary will pay about $2,514.
More importantly this means that in the Assessors system Tom’s house (and land) will start at a value of $220,000 next year while Mary’s house (and land) will start at a value of $200,000 next year. Lets say that the next year the assessor decides that properties in Tom and Mary’s neighborhood have on average increased by 1% due to sales data. In this case this would mean that the Assessor would assign an assessed value of $222,200 to Tom’s house and $202,000 to Mary’s house.
Next year property taxes will be much simpler because houses in this price range will be limited by the property tax cap (at least in my location). Tom would pay 1% of $222,200 or $2,222 in 2010 payable for 2009 while Mary would pay $2,020 for that same period.
So in this example they would pay the following: Tom would pay $5,282 for the two years of this example and Mary would pay $4,534 for those same two years. Mary would spend $300 on an appraisal and she would pay $748 less in property taxes over this two year time period.
I think the assessor’s have to do an actual assessment every seven years; other then that they use sales data in the area of each property instead to generate an increase in the base price already in their system.
I think the Allen County Assessor does a good job. My posts on proeprty taxes are not in any way attacking our local assessors. Our assessments are mailed much sooner then in most Indiana counties and I think their office is professional and competent. I think the problems are with the Indiana assessment system not with the Allen County Assessor.
Does anyone reading this post disagree with anything in my example?
Mike Sylvester
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5 Responses to “I think a lot of people should appeal their property tax assessments”
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My total gross assessed value went from $34,800 last year to $19,400. My tax liability went from $172.94 to $47.40. I don’t think I can refinance now, but I can get a lower monthly payment when the bank lowers the amount that goes into escrow.
Apparently I have benefited from their system. I could hug the assessor right now.
I agree the assessor does a creditable job. But assessments are not an exact science and its really up to the property owner to see that their information is accurate and the taxes are not out of line. Last year, for example, I discovered my house had been incorrectly listed with a finished attic, increasing the living area by 50% above the actual and raising the taxes accordingly. We have probably been overpaying for the fifty years the house has been in my family.
How about a refund, guys?
I don’t disagree with anything in your post Mike, but it looks to me like only people with homes that are worth $200k or more would actually benefit from an appeal. If you extend your example to the years 2010 and 2011 Mary would only save around $420 after paying around $300 for the appraisal. If your home was worth $100k it looks like an appraisal would cost you more than you would save in property taxes. I am guessing that the overwhelming majority of homes in fort wayne are worth closer to 100k than 200k.
Would the assessor accept a lower (especially just one) appraisal that a homeowner paid for instead of the one they did? Presumably any assessments would use comparable sales numbers from the same data base while other factors would be subject to opinion.
Evert: Tax assessments are supposed to be done the same way that they are done for bankers with at least five sales compared to your home with adjustments made to the basic selling prices for size and condition.
I tried to refinance my house and got a really low-ball assessment from an out-of-town assessor. So I thought that I would make the best of a bad situation by submitting my private appraisal to the Assessor’s office. Instead of using my 2009 sales comparisons, the assessor used 2007 sales transactions to adjust my valuation. Instead of a 26% reduction, I got a 6% reduction.
However, I intend to resubmit the same data again for 2009 tax revaluation.