Property taxes - Did I cause more harm than good?

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Planner01
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Property taxes - Did I cause more harm than good?

Post by Planner01 »

Today I went to the county office to file for homestead exemption of a house we just purchased. While there I spoke with the manager of home appraisal to see if I could get the value reduced for lower taxes. One of the things I pointed out is that although the county shows is a 4-bedroom, because that’s what the original house plans called for, the house is technically a 3-bedroom house. The original owner didn’t want to enclose the fourth bedroom in order to enjoy the views from this room. He took a note of it and said that he was going to amend it.

He also brought up that the seller attached an appraisal for $120k more than what we paid. For which I pointed out that our mortgage company waived the need for an appraisal since we put over half down and we have excellent credit. However I I also pointed out that the house was in need of renovations since it has not been touched since it was built 20 years ago. I even showed him a copy of the inspection report with the needed repairs. Who knows what will come out of this.

When I left the office I was thinking that they might go by square footage and not number of bedrooms, which doesn’t change anything. Also that lowering the number of bedrooms now I must file a permit when I go enclose the room (in the plans). I think I must have done more harm than good.

What do you think?
Last edited by Planner01 on Fri Jan 15, 2021 7:40 pm, edited 1 time in total.
Lexx
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Re: Property taxes - Did I cause more harm than good?

Post by Lexx »

Well if they lower the bedroom count, you're gonna need to get a permit to legally add the extra bedroom. However, if the square footage does not change, it may not affect your assessment. You could always ask that question of the assessor's office.

I don't think you did any harm with your visit. In fact it should give you a fairer assessment. If it comes back high, I would definitely challenge it.
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Planner01
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Re: Property taxes - Did I cause more harm than good?

Post by Planner01 »

Lexx wrote: Fri Jan 15, 2021 7:36 pm Well if they lower the bedroom count, you're gonna need to get a permit to legally add the extra bedroom. However, if the square footage does not change, it may not affect your assessment. You could always ask that question of the assessor's office.

I don't think you did any harm with your visit. In fact it should give you a fairer assessment. If it comes back high, I would definitely challenge it.
I tried to challenge it but he wouldn’t flinch. The feeling I got from him is that “your house is very nice, much nicer than the average house. You can pay.” It felt like a perceived wealth penalty. We paid $880k for the house and the MLS had an attached appraisal for $1M, which is NOT accurate. The house has been sold twice in the past 5 years before I bought it, both times for $840k. He can also compare to other homes on the street. One sold three weeks ago for $940k, 1365 sq ft bigger than ours.
LAFiddler
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Re: Property taxes - Did I cause more harm than good?

Post by LAFiddler »

Planner01 wrote: Fri Jan 15, 2021 7:45 pm
Lexx wrote: Fri Jan 15, 2021 7:36 pm Well if they lower the bedroom count, you're gonna need to get a permit to legally add the extra bedroom. However, if the square footage does not change, it may not affect your assessment. You could always ask that question of the assessor's office.

I don't think you did any harm with your visit. In fact it should give you a fairer assessment. If it comes back high, I would definitely challenge it.
I tried to challenge it but he wouldn’t flinch. The feeling I got from him is that “your house is very nice, much nicer than the average house. You can pay.” It felt like a perceived wealth penalty. We paid $880k for the house and the MLS had an attached appraisal for $1M, which is NOT accurate. The house has been sold twice in the past 5 years before I bought it, both times for $840k. He can also compare to other homes on the street. One sold three weeks ago for $940k, 1365 sq ft bigger than ours.
Property tax is a form of wealth tax. If your house is assessed near the 880k, you’ve got a fair value.

If the valuation models at your county Assessor’s office are good, the 4th bedroom will not make your value unfair.

Also, typically the assessor to permitting pipeline is one way. In our jurisdiction the permit department won’t look to the Assessor’s data for any kind of property attributes.
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simplesimon
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Re: Property taxes - Did I cause more harm than good?

Post by simplesimon »

Is the tax assessor's value higher than $880k? If not, then you won't have much of an argument.
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Planner01
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Re: Property taxes - Did I cause more harm than good?

Post by Planner01 »

simplesimon wrote: Fri Jan 15, 2021 8:07 pm Is the tax assessor's value higher than $880k? If not, then you won't have much of an argument.
Current tax assessment value is $799k.
Last edited by Planner01 on Fri Jan 15, 2021 8:21 pm, edited 2 times in total.
gch
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Re: Property taxes - Did I cause more harm than good?

Post by gch »

What did you pay for the house? What is the county appraising it at? Seems like since it was just purchased these two numbers would be identical without much argument for either side?
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Planner01
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Re: Property taxes - Did I cause more harm than good?

Post by Planner01 »

gch wrote: Fri Jan 15, 2021 8:11 pm What did you pay for the house? What is the county appraising it at? Seems like since it was just purchased these two numbers would be identical without much argument for either side?
We paid $880k just 5 weeks ago. The next value assessment will be done in April.

However I learned today that they usually use an 85% valuation minus homestead exemption.
jhd1945
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Re: Property taxes - Did I cause more harm than good?

Post by jhd1945 »

If you paid lower than their assessment, they will just tell you that you got a DEAL. Would need to get one of the Consultants (Check Google for someone in your area) that can help you challenge their number if the difference is significant.
Lexx
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Re: Property taxes - Did I cause more harm than good?

Post by Lexx »

Then what are you complaining about? The guy did you a favor and lowered your valuation. I'd laugh all the way to the bank on that one.

Case closed!
Planner01 wrote: Fri Jan 15, 2021 8:10 pm
simplesimon wrote: Fri Jan 15, 2021 8:07 pm Is the tax assessor's value higher than $880k? If not, then you won't have much of an argument.
Current tax assessment value is $799k.
MishkaWorries
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Re: Property taxes - Did I cause more harm than good?

Post by MishkaWorries »

jhd1945 wrote: Fri Jan 15, 2021 8:24 pm If you paid lower than their assessment, they will just tell you that you got a DEAL. Would need to get one of the Consultants (Check Google for someone in your area) that can help you challenge their number if the difference is significant.
And if you paid more than they'll appraisal they'll tell you that is market price.

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Jack FFR1846
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Re: Property taxes - Did I cause more harm than good?

Post by Jack FFR1846 »

Is this how abatements are done where you live? You go in and argue with some town official?

I've done abatements for both property tax and to get back parts of exise tax on cars sold. In all cases, I had to provide evidence of my claim. I have won every case. For the house, I gather recent sales of similar houses. I then specify what's different, what that is valued and how the equalized house is compared to mine. I used 10 comps. I submitted my claim and my claimed value to the board of assessors along with all evidence. They reset the value and my tax.

Perhaps your town has a similar process. Be aware that there can be a time limit where you can challenge the assessed value. There is in my town. It is based on when the property tax bill arrives.
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LAFiddler
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Re: Property taxes - Did I cause more harm than good?

Post by LAFiddler »

MishkaWorries wrote: Fri Jan 15, 2021 8:33 pm
jhd1945 wrote: Fri Jan 15, 2021 8:24 pm If you paid lower than their assessment, they will just tell you that you got a DEAL. Would need to get one of the Consultants (Check Google for someone in your area) that can help you challenge their number if the difference is significant.
And if you paid more than they'll appraisal they'll tell you that is market price.

It's good to be the Government.
It’s good to have police and schools, too.
jucor
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Re: Property taxes - Did I cause more harm than good?

Post by jucor »

Planner01 wrote: Fri Jan 15, 2021 8:10 pm
simplesimon wrote: Fri Jan 15, 2021 8:07 pm Is the tax assessor's value higher than $880k? If not, then you won't have much of an argument.
Current tax assessment value is $799k.
I'm a bit confused. You just bought this place for $880k. It is currently valued for property tax purposes for $799k. You feel it should be valued for less than that, even though you just pad $81k more? You've just established the market value of the house with your purchase -- regardless of technical descriptions of the property. On what basis are you arguing that it is worth not only less than what you paid, but even less than $81k less than what you paid.

In my locale your purchase for more than the assessed value would cause an increase in the value and an accompanying increase in taxes. I'd assume that's what will happen to you at the next round of assessments.

It seems to me that the revealing of possibility of work having been done without permits is just your second own goal. :confused
MishkaWorries
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Re: Property taxes - Did I cause more harm than good?

Post by MishkaWorries »

MishkaWorries wrote: Fri Jan 15, 2021 8:33 pm
jhd1945 wrote: Fri Jan 15, 2021 8:24 pm If you paid lower than their assessment, they will just tell you that you got a DEAL. Would need to get one of the Consultants (Check Google for someone in your area) that can help you challenge their number if the difference is significant.
And if you paid more than the appraisal they'll tell you that is market price.

It's good to be the Government.
We plan. G-d laughs.
jucor
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Re: Property taxes - Did I cause more harm than good?

Post by jucor »

Jack FFR1846 wrote: Fri Jan 15, 2021 8:35 pm Is this how abatements are done where you live? You go in and argue with some town official?

I've done abatements for both property tax and to get back parts of exise tax on cars sold. In all cases, I had to provide evidence of my claim. I have won every case. For the house, I gather recent sales of similar houses. I then specify what's different, what that is valued and how the equalized house is compared to mine. I used 10 comps. I submitted my claim and my claimed value to the board of assessors along with all evidence. They reset the value and my tax.

Perhaps your town has a similar process. Be aware that there can be a time limit where you can challenge the assessed value. There is in my town. It is based on when the property tax bill arrives.
Have you ever been successful in doing this on a property you had just purchased for tens of thousands more than assessed value?
Topic Author
Planner01
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Re: Property taxes - Did I cause more harm than good?

Post by Planner01 »

jucor wrote: Fri Jan 15, 2021 8:56 pm
Planner01 wrote: Fri Jan 15, 2021 8:10 pm
simplesimon wrote: Fri Jan 15, 2021 8:07 pm Is the tax assessor's value higher than $880k? If not, then you won't have much of an argument.
Current tax assessment value is $799k.
I'm a bit confused. You just bought this place for $880k. It is currently valued for property tax purposes for $799k. You feel it should be valued for less than that, even though you just pad $81k more? You've just established the market value of the house with your purchase -- regardless of technical descriptions of the property. On what basis are you arguing that it is worth not only less than what you paid, but even less than $81k less than what you paid.

In my locale your purchase for more than the assessed value would cause an increase in the value and an accompanying increase in taxes. I'd assume that's what will happen to you at the next round of assessments.

It seems to me that the revealing of possibility of work having been done without permits is just your second own goal. :confused
The tax assessment is never the sale price, it’s always a lot lower. The house was sold twice for the last five years, both times at $840k. But again, the house is in need of a lot of repairs and renovations because it has not been updated since it was built in 20 years.
jucor
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Re: Property taxes - Did I cause more harm than good?

Post by jucor »

Planner01 wrote: Fri Jan 15, 2021 8:59 pm
jucor wrote: Fri Jan 15, 2021 8:56 pm
Planner01 wrote: Fri Jan 15, 2021 8:10 pm
simplesimon wrote: Fri Jan 15, 2021 8:07 pm Is the tax assessor's value higher than $880k? If not, then you won't have much of an argument.
Current tax assessment value is $799k.
I'm a bit confused. You just bought this place for $880k. It is currently valued for property tax purposes for $799k. You feel it should be valued for less than that, even though you just pad $81k more? You've just established the market value of the house with your purchase -- regardless of technical descriptions of the property. On what basis are you arguing that it is worth not only less than what you paid, but even less than $81k less than what you paid.

In my locale your purchase for more than the assessed value would cause an increase in the value and an accompanying increase in taxes. I'd assume that's what will happen to you at the next round of assessments.

It seems to me that the revealing of possibility of work having been done without permits is just your second own goal. :confused
The tax assessment is never the sale price, it’s always a lot lower. The house was sold twice for the last five years, both times at $840k. But again, the house is in need of a lot of repairs and renovations because it has not been updated since it was built in 20 years.
Then the comp method "might" make sense for you if there are similar houses that recently sold for $880k but are assessed for far less than yours. If not then I cannot see that you have a case.

Tax assessments are based on the market value of a house, which you've just established via your purchase (and is confirmed as not being wholly out of line by two recent sales of the same home for about 4% less than what you paid). Presumably if it had been recently updated and was in tip-top shape it would have been worth a fair bit more than what you paid and you would not have been able to buy it for $880k, right?
Topic Author
Planner01
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Re: Property taxes - Did I cause more harm than good?

Post by Planner01 »

jucor wrote: Fri Jan 15, 2021 9:22 pm
Planner01 wrote: Fri Jan 15, 2021 8:59 pm
jucor wrote: Fri Jan 15, 2021 8:56 pm
Planner01 wrote: Fri Jan 15, 2021 8:10 pm
simplesimon wrote: Fri Jan 15, 2021 8:07 pm Is the tax assessor's value higher than $880k? If not, then you won't have much of an argument.
Current tax assessment value is $799k.
I'm a bit confused. You just bought this place for $880k. It is currently valued for property tax purposes for $799k. You feel it should be valued for less than that, even though you just pad $81k more? You've just established the market value of the house with your purchase -- regardless of technical descriptions of the property. On what basis are you arguing that it is worth not only less than what you paid, but even less than $81k less than what you paid.

In my locale your purchase for more than the assessed value would cause an increase in the value and an accompanying increase in taxes. I'd assume that's what will happen to you at the next round of assessments.

It seems to me that the revealing of possibility of work having been done without permits is just your second own goal. :confused
The tax assessment is never the sale price, it’s always a lot lower. The house was sold twice for the last five years, both times at $840k. But again, the house is in need of a lot of repairs and renovations because it has not been updated since it was built in 20 years.
Then the comp method "might" make sense for you if there are similar houses that recently sold for $880k but are assessed for far less than yours. If not then I cannot see that you have a case.

Tax assessments are based on the market value of a house, which you've just established via your purchase (and is confirmed as not being wholly out of line by two recent sales of the same home for about 4% less than what you paid). Presumably if it had been recently updated and was in tip-top shape it would have been worth a fair bit more than what you paid and you would not have been able to buy it for $880k, right?
You have a good point. What I meant is that the $1M appraisal from the seller is wrong given that’s not in tip too shape and what others have sold for in the past 3 months.
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