By Keith Loria
Let’s say you just purchased a new home that has a large property tax commitment. You may be able to do something about it. In today’s housing market, having the property reassessed is very in vogue.
“A tax assessment is an estimate on the value of your property solely for the purpose of determining how much you owe in property taxes,” says Peter Hoegen, an attorney with Hoegen & Associates, PC in Pennsylvania who specializes in tax assessments.
It’s a good bet that you may have bought the house for a price lower than the property value, so sometimes taxes can be lowered if the value has changed.
Not that it’s only about the taxes. Another reason for a reassessment is for insurance purposes, to make sure the home has an appropriate level of coverage. A third reason might be due to the changes in value that the downturn in the economy has caused.
For those who may be thinking of selling, an assessment is a good way to learn if the house is worth more than one even owes, and can provide valuable data for one looking to get a lower mortgage rate.
“If you are thinking of having your home assessed for possible readjusting of the value, it’s important to understand the protocols and timelines that your city or state has, because all are different,” Hoegen says.
The first step is to begin with the county assessor’s office. In 2012, the process has become much simpler for some, as more places are allowing you to appeal online. If that’s not an option, plan a visit to your local assessor’s office to register for an appeal.
The most common way this is done is by someone coming out and inspecting the property and comparing it to neighboring houses. Some will rely on computer models, but that could be problematic because you’re not seeing everything that can be viewed with the naked eye.
Although the appeal process itself can be relatively quick if it’s clear that a change needs to be made, actually having someone come out to your property to perform the assessment can take anywhere from a month to a year, depending on the amount of people following suit. In today’s housing market, with property values decreasing in many areas, more people are turning to reassessments to get their taxes down.
When making your case for a lower value, have at the ready documents that show what homes in the neighborhood have sold for. Prices of comparable homes that have sold in the past six months up to a year will be most helpful to build your case. Much of this data can be found on the Internet, but your real estate agent who helped you buy the home can help as well.
Remember, assessed value is often not equal to market value. Many times, an assessment is only a percentage of what the home could actually be sold for, so appealing might not be as financially advantageous as you think it will be. The last thing you want is for your taxes to rise because the house is worth more.