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tigerrocket 
LSU Fan
Member since Aug 2008
59 posts
| Property Tax Assessments (Posted on 9/18/12 at 11:05 am)
What is the best method for an assessor to use when determinging fair market value of a home or business? sales prices, comparables sales, cost to rebuild, etc?
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TheHiddenFlask 
Clemson Fan
The Welsh red light district
Member since Jul 2008
16386 posts
| re: Property Tax Assessments (Posted on 9/18/12 at 11:35 am to tigerrocket)
quote:
comparables sales
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tigerrocket
LSU Fan
Member since Aug 2008
59 posts
| re: Property Tax Assessments (Posted on 9/18/12 at 11:50 am to TheHiddenFlask)
The reason for my question is that I bought a property in August 2010. I painted inside and out and put up a picket fence. It is rented for $850 per month. The assessed value for 2012 is now 100% higher than what I paid for the property two years ago.
Although the property should be worth more now, it sure hasn't gone up 100%.
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Gr8t8s 
Alabama Fan
Athens, AL
Member since Oct 2009
317 posts
| re: Property Tax Assessments (Posted on 9/18/12 at 12:26 pm to tigerrocket)
The reason is probably because the property is no longer residential/homestead. Because you rent it out, taxes always double (At least in AL, they do). Probably the reason for your situation.
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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
63236 posts
| re: Property Tax Assessments (Posted on 9/18/12 at 1:25 pm to tigerrocket)
quote:
What is the best method for an assessor to use when determinging fair market value of a home or business?
Thanks for posting on the Money Talk Board, Brian Wilson......
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MoreOrLes
LSU Fan
Member since Nov 2008
14919 posts
| re: Property Tax Assessments (Posted on 9/18/12 at 1:34 pm to TheHiddenFlask)
quote:
comparables sales
From the last 6 months
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tigerrocket
LSU Fan
Member since Aug 2008
59 posts
| re: Property Tax Assessments (Posted on 9/18/12 at 1:48 pm to Gr8t8s)
My understanding is that Fair market value should be what a willing buyer and seller would agree upon, not some number that the assessor comes up with. House was not homestead exempt.
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K E V 8 4
LSU Fan
H-town
Member since Jul 2010
189 posts
| re: Property Tax Assessments (Posted on 9/18/12 at 3:03 pm to tigerrocket)
Using the simple 1% rule, I would guess that the fair value of your property is in the range of $85K. Amirite?
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tigerrocket
LSU Fan
Member since Aug 2008
59 posts
| re: Property Tax Assessments (Posted on 9/18/12 at 4:36 pm to K E V 8 4)
I bought the house for $48,000. It is now assessed with a fair market value of $111,000. I think I might could get $80,000 if I sold it. Taxes are now over $2,000 per year.
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K E V 8 4
LSU Fan
H-town
Member since Jul 2010
189 posts
| re: Property Tax Assessments (Posted on 9/19/12 at 7:25 am to tigerrocket)
Property tax issues aside (seems way over-valued), you are making a nice yield on your $48K investment, plus relatively minor upgrades. Congrats 
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jglass3lsu
LSU Fan
Houston
Member since Jan 2007
686 posts
| re: Property Tax Assessments (Posted on 9/19/12 at 7:56 am to K E V 8 4)
File a timely appeal of your value and present your sales price and some recent comparables to the assessor. If he is unwilling to reduce the value into a range that you believe is appropriate, take that same argument to the local board.
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tigerrocket
LSU Fan
Member since Aug 2008
59 posts
| re: Property Tax Assessments (Posted on 9/19/12 at 8:50 am to K E V 8 4)
The problem is that taxes and insurance costs about 40% of gross rents.
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tigerrocket
LSU Fan
Member since Aug 2008
59 posts
| re: Property Tax Assessments (Posted on 9/19/12 at 8:51 am to jglass3lsu)
appeal has been filed and waiting on results.
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fatboydave
LSU Fan
Fat boy land
Member since Aug 2004
4303 posts
| re: Property Tax Assessments (Posted on 9/21/12 at 10:44 am to tigerrocket)
Did you get an appraisal? If not, get one. You will need it for your appeal.
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tigerrocket
LSU Fan
Member since Aug 2008
59 posts
| re: Property Tax Assessments (Posted on 9/21/12 at 11:17 am to fatboydave)
The assessor does not give you enough time to get an appraisal done. I received my fair market value letter 2 days before the appeal deadline. I have cash sale within 2 years, which should be enough. It surely didn't go up over 100% in the last two years. If it did, I would sell it in a heartbeat.
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K E V 8 4
LSU Fan
H-town
Member since Jul 2010
189 posts
| re: Property Tax Assessments (Posted on 9/22/12 at 12:09 pm to tigerrocket)
Yes, that is typical. I don't know how much you spent on upgades, but I still calculate well over a 10% return (excl maintenance). I bet you get the valuation knocked down - like you said you have a transacton within 2 years. Good luck.
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