Appealing Assessed Property Value for Taxes - Need Help!

[JustTrying]

Hello!

I plan to appeal the assessed value of our home (for tax purposes). My argument will be based upon how property values have changed in my area. Basically, property values have only raised 5% per zillow, estately, and similar websites, but the county assessed it for much more than this. We bought less than 2 years ago, so I can't figure out why they assessed it at such a high number.

My question is this: What source is the "authority" on how housing values have changed in the region? I'm sure that zillow would not be considered the ultimate authority on the issue, but I'm not sure what source would be best to use. Any ideas?

Thanks in advance!

[Frankies Girl]

They should provide you with the data they are using to assess the property tax: recent comparable home sales, and the local tax base are usually how they figure the costs.  You should be able to locate your property and see everyone else's in the neighborhood by locating your county tax assessor's site (usually something like "XX county appraisal district" or something similar) and searching the records.

I have no idea how you'd argue your house isn't worth as much as other houses in the area. Zillow and those other sites don't mean squat to the appraisal district. Saying your house is worth less than other houses in your neighborhood is kind of hard to prove unless your house was built completely differently (much smaller with lesser cost finishes and amenities? has easements that other lots don't have?) than the norm for the neighborhood. They take into account basic stuff like square footage, lot size, and other dwelling amenities that are normal for the area.

I am protesting my property taxes based off of the fact that my house needs lots of work done and would not be worth what other recent homes sold would be worth. New roof (possibly new decking) needed, chimney cap old and damaged, interior stuff (plumbing/ electrical/structural issues), lots of things that are cosmetic, like replacing old stained carpet, count as well). Overall our house is in decent shape and we will fix everything at some point, but the one time you really want to bring up EVERYTHING possibly wrong is when protesting property taxes. ;)

I've done this before, and just pulled up the region's realtor site, downloaded information on several houses they used to compare, and then showed how my house is not on the same level - and I take lots of pictures of my house and label things to show damage or issues. Worked quite well last time, (was hoping for around 5k off, they gave me 10K without even asking! Pictures are the best proof), and I'm hoping it does again.

[Cathy]

...My argument will be based upon how property values have changed in my area....

The law here depends on the jurisdiction, which you didn't disclose. Even if you did disclose it, most people wouldn't be inclined to research the law of that jurisdiction just to respond to your post.

That having been said, and with the understanding that this is not any kind of advice but is simply a generalised comment about advocacy and making persuasive arguments, your proposed argument is unlikely to carry the day. If you are interested in winning, you will want some evidence of what your specific property is worth, preferably obtained through a professional property assessment. Generalised statements about property value growth "in [your] area" are unlikely to be persuasive.

[Another Reader]

The rules are different in every state.  Often there is a fair market value standard, but the interpretation of what that means differs among jurisdictions.  Start by understanding how your state and jurisdiction value properties.  If they use comparable sales, get the list of what sales were used and determine if they properly valued your property.  Review the property file at the assessor's office to make sure they have the correct square footage and room count, including bathrooms.

You will have a limited window to file an appeal after you have been notified of the value.  What Frankies Girl describes is typical of the process.  Make sure you follow the process and meet the deadlines to file your appeal, if one is warranted. 

[pbkmaine]

I appealed my assessment and won by showing that the real estate taxes of comparable recently sold properties in my town were significantly lower than mine. My realtor was able to provide me with this information.


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[Another Reader]

I appealed my assessment and won by showing that the real estate taxes of comparable recently sold properties in my town were significantly lower than mine. My realtor was able to provide me with this information.


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What pbkmaine describes is the principle of equalization.  Not all jurisdictions allow this as a basis for an appeal.  If yours does, you will have to do some homework to show your property was assessed and taxed inconsistently with similar properties.  Often that means showing your assessed value is a much higher percentage of market value than similar properties.

[Faraday]

I appealed my taxes and was successful at getting a reduction on the basis of two important facts:

1) I had a recent professional appraisal, taken for a refi. It showed a value significantly below the designated tax value.
2) The house next door, with similar construction but much larger (by over 500 square feet) sold for less than my home appraised in a short sale.

You can more effectively argue your point with a professional appraisal and with sales activity in the neighborhood that supports your assertion. A good realtor would be worth every penny to have in your corner on this, particularly one who knows the folks on the appraisal board and may have assisted another homeowner in getting a tax reduction!

[JustTrying]

Thanks for the replies!

I see where Frankie's Girl and Another Reader are coming from, and will call the assessor tomorrow to ask how they reached the number that they reached. I live in Washington State, so "State law requires that assessors appraise property at 100 percent of its true and fair market value in money, according to the highest and best use of the property. Fair market value, or true value, is the amount of money that a willing and unobligated buyer is willing to pay a willing and unobligated seller." I live in an area in which houses are very diverse, so looking at comparable sales is not as clear as it might be in a suburb with cookie-cutter homes. Taking a closer look at how the assessor came up with their number will be helpful, and I'm sure that if I know what homes mine was compared to, I will be able to make a stronger argument.

I purchased the home 1.5 years ago, and the county claims that the value has risen by 14% in that 1.5 years. I understand where you all are coming from in saying that I should look at comparable homes rather than at how overall property values have changed in the area. However, I still theorize that my home did not magically increase in value at a faster rate than the other homes in the area. To be clear, I agree that Zillow is super inaccurate in their zestimates. However, my understanding is that looking at overall changes in property values in an area is statistics, not (z)estimation...but again, I have little understanding of how any of the real estate website complete their stats, which is why I wondered who the "authority" on changes in property values is/was.

[Another Reader]

Washington is a market value state.  Zillow is inaccurate at the overall market level as well as in the value of individual properties and it's not relevant anyway.  The assessor may have used computerized mass appraisal, but it's the result that can be challenged, not the valuation method.  Is the market value of your house as of the date of value on the notice less than the assessed value?  If you can't show that, you don't have a case.

[Cathy]

... it's the result that can be challenged, not the valuation method ...

This is an astute observation that is true in the large majority of legal contexts. One could cite many authorities in a wide variety of different contexts for the proposition that "[a]n appeal lies from the judgment, not the reasons for judgment": R. v. Sheppard, [2002] 1 SCR 869, at para 4.

[JustTrying]

Washington is a market value state.  Zillow is inaccurate at the overall market level as well as in the value of individual properties and it's not relevant anyway.  The assessor may have used computerized mass appraisal, but it's the result that can be challenged, not the valuation method.  Is the market value of your house as of the date of value on the notice less than the assessed value?  If you can't show that, you don't have a case.

Ha! Well, Another Reader, yes, I believe that the market value of my home is less than the assessed value, (hence why I would appeal them) but the only way to know the fair market value for sure would be to put it up for sale and see what offers come in. Since I want to keep living in the house, I don't plan to do that! Instead I'll have to look at what they used for recent comparable home sales and see if it makes sense to appeal or not. Maybe the county is right, and my home has increased in value at an astounding rate!

[forummm]

In my jurisdiction, there's an independent panel of 3 homeowners that hear your argument and the argument of the county assessor and they make a judgment. So the rationale they use is up to them. For me, I argued that my assessment should be the purchase price of the properties, since I had just purchased them from disinterested 3rd parties. The panel agreed. Now my assessment has gone way up, but I think it's pretty reasonable (the value has gone way up too) so I'm not going to contest it.

[Blonde Lawyer]

Consider how long you plan to stay in the property.  If there is any chance you will be selling soon you don't want to go on record about all the reasons why your home is worth less money.  That will hurt you in your sale.  Also, do you know how you were assessed prior to you purchasing the house? Frequently, the house is under valued for tax purposes.  You might see a a larger increase in the assessment to equalize that.  For example, if your taxes went up 14% it might not mean that the town thinks your house value went up 14% since you bought it.  It might have been assessed too low before you bought it so the amount from what you paid and the new assessed value might only be 5% even though the total assessment increase is 14 (undervalue to current value.)

For those that are saying to check that square footage and number of rooms/bathrooms is accurate - what happens if one checks and it is wrong but in their favor (say the town is counting one less bathroom).  If they ever re-assess, could they seek money for prior years for their mistake or only going forward?

[Cathy]

If they ever re-assess, could they seek money for prior years for their mistake or only going forward?

I did a bit of research on this question.

RCW 84.40.040 says that the assessor must finish "placing valuations on all properties" by May 31st for most properties and by August 31st for some other properties.

RCW 84.40.320 says that the assessor must provide a listing of assessments to the county board of equalization by July 15th, except that for the properties where the assessor had until August 31st to assess them, they don't need to be provided to the board of equalization until August 31st pursuant to RCW 36.21.080 and RCW 36.21.080.

These provisions appear to place a deadline on when the assessor is free to change the assessment. However, the case law says that these provisions are not mandatory and that the true deadline is that the assessment must be made "in the year before the taxes are to be levied, including an allowance for time in which to appeal": Niichel v. Lancaster, 97 Wn2d 62 (Wash Sup Ct 1982). This still appears to prevent retroactive changes though.

RCW 84.48.200 says that the department may make rules for the administration of the county boards of equalization.

One such rule is WAC 458-14-116. It says that the board may adjust upward the valuation of a property, either in response to a petition being filed, WAC 458-14-056, or on the board's own initiative. WAC 458-14-056 only appears to contemplate the taxpayer being able to file a petition, not the assessor, but the assessor could invite the board to exercise its power to act on its own motion. However, in either case, WAC 458-14-116 says that such upward change "shall become effective thirty days after the date of service or mailing of the notice of the adjustment". This appears to rule out retroactive increases by the board of equalization.

RCW 84.48.065(1) contains another statutory authority for modifying assessments. This statute provides that "The county assessor or treasurer may cancel or correct assessments on the assessment or tax rolls which are erroneous due to manifest errors in description, double assessments, clerical errors in extending the rolls, and such manifest errors in the listing of the property which do not involve a revaluation of property...".

This is not the most clear statute. It's somewhat unclear whether the condition that the errors "do not involve a revaluation of property" applies to all of the grounds for change, or only the last one.

In an "unpublished" opinion with purportedly no precedential value, the Court of Appeals for Division One appears to suggest that the condition applies to all grounds but that the prohibition on "revaluation of property" only prevents the assessor from making new subjective judgments and does not prevent the correction of certain factual errors that, when corrected, increase the amount of the assessment: Legacy Partners Riverpark Apts Buildings A/b, Llc, App v. King County, Res, 69073-6 (Wash Ct App 2013). The Court did not articulate a very clear test to determine whether a given correction is permissible.

Many courts in the US have local rules that purport to allow the court to issue decisions without precedential value. The constitutionality of these rules has been questioned on various grounds. Anastasoff v. US, 223 F3d 898 (8th Cir 2000) holds that these rules are unconstitutional in the federal court system, but that decision was subsequently vacated for mootness, 235 F3d 1054, which latter opinion says that the question of the status of "unpublished" opinions remains open. No case that I know of has discussed the constitutionality of these rules in state courts.

The Legacy Partners case is actually a good example of why "unpublished" opinions can be a bad idea (which is, of course, separate from whether they are legal). In Legacy Partners, the Court was apparently confronted with a novel issue with no cases directly on point. The Court must have recognised that its decision, if precedential, would have effects in many other situations. But apparently the Court wasn't prepared to take on that responsibility, so it simply asserted that its decision would not be precedential. If you were a party to the case, wouldn't you question whether the Court really did a thorough job contemplating the issues, if it didn't think its decision would ever be cited again? The ability to issue an unpublished opinion arguably gives the Court the power to absolve itself of its judicial duties when it feels they would be too difficult to exercise, which may be inconsistent with the proper role of the courts in our legal system.

[Blonde Lawyer]

Wow Cathy, thanks for posting all that.  I often come across interesting legal issues online and up diving down the rabbit hole.  At least we enjoy our profession. :)