Author Topic: Self-representation to Appeal a Property Tax Reassessment - Good Idea or Not?  (Read 700 times)

cassafrass

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My husband and I just purchased our first home in September (hooray!) and received a letter last month from our school district attorneys saying that they want to reassess our property value at 87.5% of our purchase price. My husband wants to attend the hearing and represent us himself (he is not an attorney). My feeling is that this is either super-Mustachian or super-stupid. If my husband represents us himself, we save the attorney fees, but there's a chance he gets steamrolled by the school district attorneys.

Thoughts from any of you who have experience with something similar?

Some more details:
We purchased our house for $190,000 in Sept - it was a competitive market and we were in a time crunch so maybe paid a little more than we should have. We have not discovered any undisclosed problems with the property since we moved in that would affect the resale price.

Our current assessment value is $115,000
School District Millage Rate 25.49
Annual Taxes: $2931.35

Proposed new assessment value is $166,250
New Annual Taxes: $4237.71

This is an annual increase of over $1300, so I think it could be worth it to hire an attorney if we can get significant tax relief. I'm just not sure if it's likely that the court will rule in our favor.

We got quotes from three attorneys: one quoted a flat rate of $350, one a rate of $550 and one said they didn't think our potential savings would warrant paying their fees.

I'd appreciate any thoughts or advice!

MDM

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I'm just not sure if it's likely that the court will rule in our favor.
The primary evidence that the house is worth that much is the price you paid.

You may be able to counter that with recent sales of comparable homes.  Do you have that information?

cassafrass

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The primary evidence that the house is worth that much is the price you paid.


That's why I have doubts as to whether it's worth it to bother trying to appeal. Our argument would be that we overpaid because we moved across the country and couch surfed at my in-laws with our two toddlers for about 2 months before we got really desperate and bought the first decent-looking place for asking price. Maybe that won't hold up in court, but it made sense at the time!

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You may be able to counter that with recent sales of comparable homes.  Do you have that information?

I've been doing a little digging but other than looking on Zillow's recently sold, I'm not sure where to find that info. Our neighbors purchased their house about 5 months before us and paid about the same price for +600sqft. And in general, it looks like houses in our area that were sold at our price generally have an additional bathroom.

ender

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Our property was assessed almost 100% of the purchase price. Is it actually that common to be able to get the assessment down so much less than the assessment?

I'm trying to imagine this conversation playing out.

"Our house isn't worth $166k, that assessment is too high."
"Well what did you pay for it?"
"well... $190k"
"why did you pay $25k too much?"
"..."



cassafrass

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"why did you pay $25k too much?"
"..."

"Because I was couch surfing at my in-laws, living out of suitcases and my 2 toddlers were driving me nuts and my MIL was driving me nuts and the thought of facing another day without having a place of my own to hang my hat was driving me nuts so...."

But I get it. In the end we paid what we paid. Not sure if it's worth appealing. But I have heard of others in the area hiring attorneys who successfully reduced their assessment so I'm just trying to wrap my head around what we should do.

MDM

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I've been doing a little digging but other than looking on Zillow's recently sold, I'm not sure where to find that info.
Many communities have property tax information online.  You might start here: NETR Online Public Records, Search Records, Property Tax, Property Search, Assessor and drill down to your location.  Assuming it is available, that is likely the database your assessor's office uses to justify your assessment.

JLee

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Our property was assessed almost 100% of the purchase price. Is it actually that common to be able to get the assessment down so much less than the assessment?

I'm trying to imagine this conversation playing out.

"Our house isn't worth $166k, that assessment is too high."
"Well what did you pay for it?"
"well... $190k"
"why did you pay $25k too much?"
"..."

Assessed value and market value are usually different.

https://thelendersnetwork.com/assessed-value-vs-market-value/

Aggie1999

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I formally protested my property taxes a few years ago without an attorney. Biggest waste of time I ever did. Basically there were three 90 year old geriatrics on the board that were clearly on the county's side. I was selling my house and it had been on the market for ~2 months. Asking price was ~40 grand less than the county's assessment and it still hadn't sold. I showed them this. Even though the geriatrics had made it clear at the start of the proceeding we were to only address them, the county rep directly addressed me saying I needed a better realtor. They said nothing about this. I also had comparable sales that showed it should be less. Didn't matter.

In the end the board lowered the assessed value, but "conveniently" it was a little bit above the cutoff where it would have lowered the 10% max tax increases the law said the county could do per year for home owners.

To the OP: Since they are assessing your property for less than you paid last year I'd take that as a win and move on. At least where I am from it's always the opposite.

Buffalo Chip

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These tax boards are rigged. In my home town, assessments are routinely 10% above the market value of the house. Even if you can show that you paid less than the assessed value, its darn near impossible to get the assessment lowered.

As with most things based in politics, you should expect to get screwed.

In the OPs case, his assessment will be less than the amount paid for the house. Id call that a win.

Michael in ABQ

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Probably not worth it. If you don't have comparable sales data some jurisdictions will let you argue based on equity. I.e. your neighbor's identical homes are all assessed from $140-160k so yours should be in that same range. Another thing you can look at is the condition/quality of the property according to the assessor. A lot of times the assessed value is based on cost data and then checked against comparable sales. It's possible they have the quality or condition of your property as superior to what it really is. I.e. a standard suburban tract home that's 20-30 years old being rated as good quality and good condition as opposed to average quality and average condition.

Jon Bon

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Be glad its not 100% of the value. That is how it works where I am.

I am pretty sure there is nothing you can do. If it is an arms length transaction the market value = the accessed value for a least a few year. I mean what is more fair then that?

I get it, paying property taxes sucks big time, there usually are things you can do to limit this next time you buy, so check into that then. Caulk this up to a lesson learned.






icyappraiser

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I successfully self-represented in a similar situation when I bought my house a couple years ago, but they had assessed it near $190k when I had just paid $155k. I got it brought down to $150k. That being said, it was a bunch of 80-90 year olds who were not all that interested in my factual arguments. Didn't seem like a very scientific process. Eventually I pivoted to chatting with them and saying I was so happy to be living in the community and everyone left happy. Doesn't sound like you have much of a case considering you are already below what you paid.
« Last Edit: April 17, 2019, 10:26:56 AM by icyappraiser »

MDM

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Note that assessed value may be set by law at some fraction of appraised value, so having a property tax assessment of 87.5% of selling price is not necessarily favorable.

E.g., see How Much Over the Property Tax Value Can I Set My Asking Price to Sell My Home? - Budgeting Money, including
Quote
The property-tax value is different from the actual value, though. In Denver, for instance, assessed value is 29 percent of market value: If your house is worth $100,000, the value for property taxes is $29,000.

Milkshake

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Idk about your state, but our state law says that the basis for determining the tax on a property SHALL BE a value that is within 5% (plus or minus) of the fair market value of the home. So if an appraiser said its worth $166k, our state's assessed basis could be $157.7k-174.3K. From that value they take various credits and factors and then tax at a defined rate.

If our tax assessment came back at 87.5% of the value, I would clamp my mouth shut and thank the higher powers, because the assessor can choose to raise it in a review if it's wrong. But again, our states might have different laws.

six-car-habit

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  We had a representative from the tax assesors office come out several years ago , off cycle.  In our area most counties try to actually visit the site every 4 or 6 years.  Anyhow we got two visits within two years, I asked why and it was because another resident of the town had disputed their assesment , so the assesors office employee looked at our house because it was comparable in sq ft - lot size - bedrooms, etc.   
   The tax office was making a set of recent comps to defend their stated valuation on the other fellows home...so at least in this county, it was not decided in the same night the protest was brought before the appeals council...and was going to cost the county a few extra hours of labor in research.

MDM

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Idk about your state, but our state law says....

But again, our states might have different laws.
Yes, the laws differ among states.  That's why the OP needs to understand what applies to them.

cassafrass

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Yes, the laws differ among states.  That's why the OP needs to understand what applies to them.

Thanks for the input, everyone. It's helpful to hear your experiences going up against the tax board.

I don't know what our laws are here in PA, so I have some research to do. It seems that homes in my area are assessed below their sale value, so I'm guessing that is written into the law somewhere.

Our hearing is set for the end of May, so I'll check into the laws, get some more solid comparables info and see what we come up with. I think we've decided not to hire an attorney, so we just need to decide if we're going to bother attending the hearing ourselves or just take the 87.5% assessment.

merince

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You need to figure out what the assessed values of the homes in your neighborhood are. In mass appraisals, the values are based on recent sales (3-6 years) for similar homes. You overpaid, and they are assessing you less than what you paid, so you're getting a break already. You can lower the assessment if you can show your neighbors are paying significantly less than you for a similar property.