What to Do When Your Town Does a Revaluation and You Disagree with your Assessment
By Warren Leisenring Jr., Consultant for Tax My Property Fairly
If you receive a notice or "impact statement" from the assessor stating an increase in the market value of their property, shock, disbelief and frustration are only a few of the emotions that you feel.
After you have had time to catch your breath, we would like to help you understand what is happening and how you can find out if the increase is justified or if your property may now be excessively assessed.
Properties are assessed by what is called a Market Value. Market Value is what a property would sell for between a willing buyer and a willing seller on an open market. An assessor will group recent sales of similar types of residences to arrive at an average selling price for those types of residences. This is how an assessor calculates an assessment for your property.
There are two values that are used on your property. They are the "Assessed Value" and the "Full Market Value."
- The "Assessed Value" is the amount of value you pay taxes on. This is determined by what is called the "Equalization Rate."
- The "Full Market Value" is the current value the assessor has determined your property would sell on an open market.
When a revaluation is made, it is to restore the "Equalization Rate" back to 100%, which is equal to the "Full Market Value" of your property. As years go by, properties may sell for more than the assessed value. If the assessment on the property remains the same because of no revaluation, the "Equalization Rate" will drop because properties are now assessed at only a portion of the actual "Full Market Value”.
Even though your assessment may go up in a revaluation, it does not necessarily mean you will pay more in property taxes. The amount of property tax you pay is based on the "Assessed Value" of your property and the tax rates of the local town, county and school budgets. As the net worth of the town increases during a revaluation, the amount needed per $1,000.00 of "Assessed Value" for the Municipal budgets will decrease. Therefore minimizing any potential increase in the amount of property tax you would pay.
An "Equalization Rate" can be factored by many things.