Property Tax Assessments | TigerDroppings.com
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tigerrocket
LSU Fan
Member since Aug 2008
102 posts

Property Tax Assessments

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?


TheHiddenFlask
Clemson Fan
The Welsh red light district
Member since Jul 2008
17674 posts

re: Property Tax Assessments
quote:

comparables sales


tigerrocket
LSU Fan
Member since Aug 2008
102 posts

re: Property Tax Assessments
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%.


Gr8t8s
Alabama Fan
Member since Oct 2009
662 posts

re: Property Tax Assessments
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.


LSURussian
LSU Fan
Member since Feb 2005
85147 posts

re: Property Tax Assessments
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
18525 posts

re: Property Tax Assessments
quote:

comparables sales




From the last 6 months


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tigerrocket
LSU Fan
Member since Aug 2008
102 posts

re: Property Tax Assessments
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
Member since Jul 2010
267 posts

re: Property Tax Assessments
Using the simple 1% rule, I would guess that the fair value of your property is in the range of $85K. Amirite?


tigerrocket
LSU Fan
Member since Aug 2008
102 posts

re: Property Tax Assessments
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.


K E V 8 4
LSU Fan
Member since Jul 2010
267 posts

re: Property Tax Assessments
Property tax issues aside (seems way over-valued), you are making a nice yield on your $48K investment, plus relatively minor upgrades. Congrats


jglass3lsu
LSU Fan
Houston
Member since Jan 2007
720 posts

re: Property Tax Assessments
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.



tigerrocket
LSU Fan
Member since Aug 2008
102 posts

re: Property Tax Assessments
The problem is that taxes and insurance costs about 40% of gross rents.


tigerrocket
LSU Fan
Member since Aug 2008
102 posts

re: Property Tax Assessments
appeal has been filed and waiting on results.


fatboydave
LSU Fan
Fat boy land
Member since Aug 2004
7698 posts

re: Property Tax Assessments
Did you get an appraisal? If not, get one. You will need it for your appeal.


tigerrocket
LSU Fan
Member since Aug 2008
102 posts

re: Property Tax Assessments
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
Member since Jul 2010
267 posts

re: Property Tax Assessments
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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