By Jane Blanchard
An assessment is a tool of the local government to figure out how much you should pay in property taxes. But does your assessment match the assessment of others in your neighborhood?
4 Parts of the Assessment
The appraisal – Current fair market value usually determines an assessor’s appraisal.
The assessment rate or ratio – The assessment rate is the difference between the market value of the home and the assessor’s appraisal value. Typically, it’s a number determined by the total market value of the locality.
The assessed value – By multiplying the appraisal by the assessment rate, the assessor will come up with the assessed value.
The tax rate or mill levy – The tax rate starts with an estimation of how much a locality thinks it needs for the year. The mill levy is what you get when you divide those estimates by the total value of all properties in the area.
The assessor takes the appraisal amount, and multiples it by the assessment rate. The resulting value, multiplied by the tax rate, is your annual property tax.
Discrepancies with the Appraisal
It’s possible the assessor based your assessment on old criteria. For example, if the local housing market was really swinging a year before you purchased, but it’s stagnated since, you need to know your assessment didn’t ride on the previous year’s numbers.
The opposite is also true. If you purchase your home at one price, then the market drops and now your house isn’t worth that price anymore, then you may need a reassessment.
Check on the market values of homes similar to yours in the neighborhood. You can search for them online along with how much each pays in property taxes. With that information, you can figure out around how much they were assessed for by the town.
Discrepancies with the Assessment
Your assessment can contain miscalculations, outright mistakes, and misinformation. Pore over it point by point and investigate each of those points.
For example, the assessment might have a space listed as a full bedroom when it’s only just a glorified walk-in closet. It may state the property is far larger in square footage than it actually is. Look out for things like these and take notes.
What to Do With the Information
Gather all of your documentation, and everything possible that supports your claim. Get in contact with your assessor’s office. Ask, politely, what you can do about discrepancies with your assessment. Some locales will let you meet with an assessor. Some others require you to file a formal complaint.
You may have to go through a process, and it’s important that you do it right. If your evidence is strong, and you follow the rules, you can have your property taxes lowered. Just know that it’s more of an uphill battle in some places.
For more tips and tricks, head to Modernize.com.