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Property Tax Assessments
Posted on 9/18/12 at 11:05 am
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?
3
Posted on 9/18/12 at 11:35 am to tigerrocket
quote:
comparables sales
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%.
Although the property should be worth more now, it sure hasn't gone up 100%.
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.
Posted on 9/18/12 at 1:25 pm to tigerrocket
quote:Thanks for posting on the Money Talk Board, Brian Wilson......
What is the best method for an assessor to use when determinging fair market value of a home or business?
Posted on 9/18/12 at 1:34 pm to TheHiddenFlask
quote:
comparables sales
From the last 6 months
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.
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?
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.
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 
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.
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.
Posted on 9/19/12 at 8:51 am to jglass3lsu
appeal has been filed and waiting on results.
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.
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.
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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