Understanding Real Estate Tax Re-Appraisals

New real estate tax assessments raise eyebrow and wrinkle foreheads unless you are aware of the facts.

Even if your house was up for sale like Ed McMahon’s Mediterranean-style estate near Beverly Hills, California, you are still beholden to pay the real estate taxes until the house is turned over to a new owner. In the meantime, what does it mean should you get a notice about an upcoming real estate tax re-appraisal?

Every number of years, when property values on a town’s record keeping tax role seem to get out of line, a municipal-wide appraisal is made. It’s called a mass appraisal and usually is done every 7 to 15 years.

Mass real estate property appraisals are the process used by the local government for valuing a group of properties as of a given date. There are about 70,000 different taxing jurisdictions with different deadlines and revaluation criteria to impose.

For the taxing authority to employ an appraiser would be too costly. A mass appraisal is determined by legal and budgetary decisions and each town has its own agenda.

A real estate mass appraiser does not go inside a home unless the property owner happens to be there and they invite him in. The mass appraisers are contracted to view the properties front and back, which is commonly referred to as a walk-around appraisal.

A professional fee appraiser, on the other hand, would look at one property at a time. He will go into the house and look at all the elements, record and analyze various criteria, consider the depreciation factors into his account as he weighs those results against comparable homes before rendering his final conclusion.

Consider who’s doing the re-appraisal. The mass appraisal process provides valuation, although quickly obtained, on forms that become transferred to your property record card. To the person measuring your home, time is of the essence and errors occur.

Sometimes the appraisal process involves merely driving by to note if there are any changes (called a “windshield appraisal”). Ask yourself, how much attention was given to your property if less than $15 or $20 was allocated per appraisal. The people employed to gather the information (hired by a mass appraisal contractor tying to make a profit) are on a quota, have questionable appraisal skills and are not a substitute for careful analysis.

So what can you do about assessments that seem inflated?

As a homeowner you need to check for mechanical errors! Facts are often omitted, inaccurate data is often recorded or the comparable properties are totally off base! Many property tax experts claim that 50% of homeowners may be paying more taxes than they should be due to mistakes in property assessments.

Do you know what the experts say? They say that property tax assessments are not reliable.

– Consumer Reports has published that property tax records show an error rate of 40% exists in estimating property taxes. (Nov.1992 v57 nil p.723)

– The National Taxpayers Union writes that as many as 60% of homeowners are over assessed — their assessments are not in line with their home’s value. (“How To Fight Property Taxes” 2004 p.1)

Tax rates are an entirely another matter. The tax rate has nothing to do with the results of the appraisal. The tax assessor can neither raise nor lower the tax rate. It is independent of the law. That tax rate is derived from the budget expenses and arrived at by the City Council.

Dispute your assessed values if you think it’s too high. Put it in writing and make an appointment to go before the board of equalization where you can appeal those values and you can potentially save yourself many thousands of dollars. These appeals must be put in writing to the board by a certain deadline.

Get consumer help in matters relating to real estate property taxes.

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