As usual at this time of year, I have received a lot of calls asking about the recently released property assessments. Most of the time, the property owner is either pleasantly surprised at their new assessed value or upset that the value is too high and they may need to pay more tax. Many times there is confusion regarding how the whole process works. Here is a very brief summary of the process.
Property assessments (the value attributed to your home for the purposes of taxation) are not market value (the price you would obtain if you were to sell your home). In any given year, property assessments can be all over the map. Even in the same area and same type of property, sometimes we will see some prices up while others are down. Due to our crazy market last year, in most cases the assessments are up this year. The assessed value affects what you will pay in property tax; however it is not an accurate reflection of what your home is really worth to buyers. This year it seems that most assessments are still lower than market value. However there may be some higher than market given the slight price drop we have seen since Spring on detached homes in some areas.
There are two main reasons that property value does not reflect true current market value: timing of the assessment valuation and the information used to arrive at the value.
Timing: Property assessments are based on government estimates of the value of the home in the previous year as of July 1st. By the time you receive your property assessment it is already six months out of date. A REALTOR®'S market assessment i
Information used: Assessors value approximately 2 million properties every year. We sell a lot of homes but I still value fewer than 100 homes per year. I therefore have time to look at a house carefully;the assessor cannot look at 2 million houses, renovations, street appeal, etc. They look at fundamentals like lot size and house age but are not able to factor in other important elements which may add (or detract) from the property's value. They use a mass appraisal system where we look at each home individually and will have been in not only the home we are valuing but also the other homes which we compare it to in order to determine likely market value.
If you have questions about your assessment, your home's market value, or if you have questions about appealing your assessment, please contact me. I have assisted clients in successfully appealing their assessments. If you really believe the value given is not appropriate, and the evidence supports your belief, you could successfully appeal.
Assessments must be appealed by January 31, 2017.