Author Topic: Reducing property tax  (Read 1180 times)

Catica

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Reducing property tax
« on: April 25, 2020, 07:58:46 AM »
I have a question about how one can reduce taxes on a property.  Does any one know what goes into calculating house worth?  I looked up the taxes my neighbors are paying for their properties and both properties on each side of me have exactly the same size plot as me but their lots values are $60,000 less than mine.  I don't know why, the only difference I see is that I have an old carport sitting on my lot and they don't.  What goes into a building value? sq footage and what else?  Beyond the sq footage does it matter that one property is a 2 family house and the other 3? 

johndoe

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Re: Reducing property tax
« Reply #1 on: April 25, 2020, 08:34:13 AM »
I imagine every county could be vastly different.  This was a news event in my metro area last year, as values were going up an average of ~15% and in some parts of the city more like 30%.  One complaint was that aerial images may improperly judge the size of homes, perhaps your carport could be counted as livable?  There was a complaint process online, and I did it.  The instructions said you could take photos, send stats, etc.  I listed recent sale prices and assessed values after looking at the parcel map online.  I was surprised how much the values varied in my suburban neighborhood.  In my process you had to submit your own proposed value; my county accepted my proposal. 

Dee18

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Re: Reducing property tax
« Reply #2 on: April 25, 2020, 09:17:49 AM »
I had the value of my house reduced for tax purposes by submitting photos and information.  In my county I could go to the tax office and see the file on my property.  That was interesting. For example, I learned why the soil kept sinking near the front sidewalk  (a huge tree had been cut down there years before).  Everything counts in my county:  number of bedrooms and baths, condition, updates...you can bring up anything. 

Catica

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Re: Reducing property tax
« Reply #3 on: April 26, 2020, 04:32:46 AM »
Thank you both for your your experiences.  It looks like my city releases abatement applications after third quarter bill, so I missed it already this year.  Is there a possibility that they can raise my tax?  Let's say someone comes to my house and sees that my house inside is really really awesomely renovated (which you can't see from the outside).

LaineyAZ

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Re: Reducing property tax
« Reply #4 on: April 26, 2020, 10:52:52 AM »
By coincidence I'm also appealing a property tax increase.  And my county here in AZ also does values by comparing street and aerial photography to their property records.
What counts is "livable square footage", i.e., dwellings that are heated and cooled.  "Non-livable" would be an unheated garage or workshop.  They don't look at interiors.

In my case the aerial photos are indeed showing more rooftop, but that's only because I added roofing to the entire back of the house for a screened-in patio.  The county had no way of knowing it's not heated or cooled, so now I have sent in my petition for review.  The petition had to be sent within 60 days of the notice or you forfeit your right of appeal until next year's cycle. 
As of now I'm waiting on the review decision, with the understanding of course that the Assessor's office has probably delayed all pending work due to Covid-19. 

Catica

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Re: Reducing property tax
« Reply #5 on: April 28, 2020, 04:32:36 AM »
It seems like a lot of counties rely on aerial photos to determine value of one's property, among other criteria. I never knew that.  Is this how they figure out square footage?  I can't wait to appeal!

Fishindude

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Re: Reducing property tax
« Reply #6 on: April 28, 2020, 07:09:52 AM »
Take this information down to the courthouse and share it with your county assessor to see if anything can be done.
I've done this and had corrections made.  They make occasional mistakes and from my experience, the county folks have been good to deal with.

zolotiyeruki

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Re: Reducing property tax
« Reply #7 on: April 29, 2020, 08:43:07 AM »
I appealed our assessment a couple years back, and gained a lot of insight into the process.  My neighborhood, was developed as a master planned community, so all the houses in our section of the development are one of a half dozen floor plans.  My county assessed value like so:

1) Find all houses in that neighborhood that sold in the two years leading up to July (they do assessments in the fall, so home sales from July to October don't count).
2) Filter it down to houses +/- 400 square feet of yours
3) Calculate an average $/sqft for these homes
4) Multiply that by the sqft of your home
5) Adjust value by looking at exterior--brick or stone vs vinyl siding? English (look-out) or walk-out basement?  Does it have water views?

In my case, it had been a crazy spring, with homes selling above asking price, and then the market cratered in June, with homes dropping in price 10%, and then sitting on the market for months on end.  I was able to get the value dropped by about 6%, which I was satisfied with.

Car Jack

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Re: Reducing property tax
« Reply #8 on: April 29, 2020, 09:03:13 AM »
OP, I think you're looking at it in somewhat the correct way.  The way valuations are determined are by normalizing everything.  Thus, if you and a neighbor had exactly the same size and type of lot, cookie cutter same house with no differences inside or out, they'd be valued the same.  If your interior was updated 2 years ago for $50k and your contractor took out permits, they know this and will add to your value.  I applied for and received an abatement shortly after moving into my present house.  I took all the comps that were used in the sales material and applied the standards.  House #1 is the same age and size as mine but has a 2 car attached garage and its tax is lower than mine.  House #2 is larger than mine with a finished basement where mine is unfinished and it has a lower tax than mine.  Out of 10 comps, I used the 5 that would support my case.

But yes......they can increase your tax.  If you tell them that the neighbor's house is exactly the same in every way and they come out and look at their house and your house and find the neighbors still have the olive drab colored kitchen installed in 1972 and you have a fashion magazine kitchen, rehab'd a year ago and both of you have the same tax, guess what?  You lose and pay more.

Good luck, but you will really want to make a solid case and ask for reasonable changes.  In my case, I did just that and won.  While turning in my application, they looked at it and said it looked reasonable, then told me about other people who challenged their taxes every year and submitted nothing to support their claim and were denied every year.  Don't waste their time if there isn't really a mis-match in valuation compared to another house.


zolotiyeruki

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Re: Reducing property tax
« Reply #9 on: April 29, 2020, 09:38:16 AM »
At least in my area (NE Illinois) , there's no connection between our village building department and the county tax assessor, so the assessor isn't automatically informed if you pull a permit for an improvement. They have to do their own footwork. 

Oddly enough, in Utah, the selling prices of homes are not sent to the assessor, so they don't even have that information to go on.

Of course, there's always the unpermitted work that people do in order to avoid the tax man...

Catica

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Re: Reducing property tax
« Reply #10 on: May 02, 2020, 05:09:05 AM »
I have no idea what the interiors of my neighbors look like, but in my 3 floor house, the first 2 floors have not been updated since the 50's but the third floor is spanking new, with the all upscale appliances, hardwood flooring, custom made furniture, etc. I'm afraid that the 3rd floor will make them raise the tax but then the first two floors are horrendous, so maybe it all evens out.

YttriumNitrate

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Re: Reducing property tax
« Reply #11 on: May 02, 2020, 06:25:56 AM »
I have a question about how one can reduce taxes on a property.  Does any one know what goes into calculating house worth?

It varies a bit from state to state, but here is how assessed valued is calculated in Indiana:
https://www.in.gov/dlgf/2489.htm

Chapter 2 and 3 of the 2011 Real Property Assessment Guidelines - Book 1 probably has the answers you are looking for.

Gerard

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Re: Reducing property tax
« Reply #12 on: May 02, 2020, 05:06:11 PM »
I have no idea what the interiors of my neighbors look like, but in my 3 floor house, the first 2 floors have not been updated since the 50's but the third floor is spanking new, with the all upscale appliances, hardwood flooring, custom made furniture, etc. I'm afraid that the 3rd floor will make them raise the tax but then the first two floors are horrendous, so maybe it all evens out.

The places I've lived, assessors don't care at all how pretty or updated the interior of the house is. It's all about square footage, number of bedrooms/bathrooms, size of lot.

kpd905

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Re: Reducing property tax
« Reply #13 on: May 02, 2020, 05:56:10 PM »
I followed all the steps that @zolotiyeruki outlined above.  The county was trying to bump our value up 20% (they adjust every 3 years), but after I pulled all the recent sales in the area and met with the assessor, they dropped it to a 10% increase instead.  That was enough to save me about $300/yr, for about an hour of "work".

bacchi

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Re: Reducing property tax
« Reply #14 on: May 02, 2020, 07:05:56 PM »
I'm protesting this year. I pissed off an appraiser and he added an extra bedroom + bathroom to the 1-1 garage apartment, which bumped the assessed value by ~$30k.

Lesson: Treat appraisers like cops. You may beat the rap but you can't beat the ride.