Unequal Assessment

Grieving by Unequal Assessment is very hard to win.

It is not because the property owner can not prove Unequal Assessment, it is because it is mainly decided on the interpretation of the instructions (or laws) on the RP-524 Grievance form and the RP-524 Ins form.

For assessment purposes, in the eyes of the Real Property Tax Services the assessor is always presumed to be correct, right or wrong. The Board of Assessment Review is also told that the assessor is always presumed to be correct.

With this being the case, with an inexperienced Board, it is easier for them to side with the assessor when they do not know the correct laws rather than research the laws themselves. It is up to property owners to overwhelmingly prove their grievance.

On the RP-524 form under Unequal Assessment, the property owners can choose the reason they believe their property is Unequally Assessed.

They could choose either:

1a: "The assessed value is at a higher percentage of value than the assessed value of other real property on the assessment roll." OR/

1b: "The assessed value of real property improved by a one, two or three family residence is at a higher percentage of full (market) value than the assessed value of other residential property on the assessment roll or at a higher percentage of full (market) value of all real property on the assessment roll".  (Many times the word OR is overlooked and 1b is seen as only one choice. It is not.)

Form RP-524 - Tax.ny.gov - New York State

Form RP-524-Ins:3/09:General Information and Instructions

This is where the problem begins.

New York State requires assessor's to assess properties at a uniform percentage rate. This is taken from the Uniform Assessment Standards adopted by the New York State Board of Real Property Services:

1.1 Standard of Assessment: All real property is assessed at its current full value.
Guidance: The real property tax is an ad valorem tax, meaning it is imposed against the value of property. Real Property Tax Law (RPTL) 305(2) only provides that all parcels within an assessing unit are assessed at a uniform percentage of current value (Level of Assessment, or LOA). When the Level of Assessment is not at 100% of full value, the administration of the property tax becomes less transparent. In particular, an LOA of other than 100% of full value is much more difficult for property taxpayers to determine whether they are being assessed equitably. It also becomes much more difficult for the assessor to manage the valuation process. This full value standard goes beyond the statutory requirements of 305(2), as well as, 701(b), which allows fractional assessment within classes of special assessing units, i.e., New York City and Nassau County. In doing so, this standard provides the fundamental and prerequisite underpinning of a transparent and equitable assessment process.

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Maybe a clearer explanation of this would be known as the Equalization Rate. You can see the explanation in this link:

www.tax.ny.gov› pdf › publications › orpts › under_eqrates  

In this publication it says:

"Equalization rates are the state's measure of each municipality's Level of Assessment (LOA). Each assessor is required by law to state the municipal LOA on each year's assessment role. The state determines the equalization rate by analyzing the locally stated LOA. In accordance with national standards, the Office of Real Property Tax Services (ORPTS) reviews the work of the assessor and determines whether the stated LOA is within adequate tolerances to be used as the equalization rate. If certain criteria are met, the LOA becomes the rate. In municipalities where ORPTS cannot accept or confirm the LOA, ORPTS uses its own independent estimate of total market value to compare to the total assessed value."

In other words whether the assessor is right or wrong in measuring the LOA, it is ultimately the state that determines the final LOA or equalization rate. Once this is done then all properties are valued at that rate. This will most likely be the assessor's defense. This will be extremely hard to overcome if the assessor does not have an open mind to listen to your grievance. It will also be as hard with a Board of Assessment Review if they may not know the laws and side with the assessor. Same with the Small Claims Hearing Officer. Do not be surprised to hear: "In order to prove "unequal assessment", you must prove it against all other properties on the assessment roll." This is not accurate.

If you decide to take this route, here is a suggested way to approach it.

In the publication of the Uniform Assessment Standards adopted by the New York State Board of Real Property Services it states:

1.6. UNIFORMITY: There is uniformity in value for all parcels on each year's assessment roll. Guidance: RPTL 305(2) provides that all parcels within an assessing unit are assessed at a uniform percentage of current value. While a roll on average across all properties may be assessed at full market value, assessments may in fact not be uniform between property types or within property types. The uniformity standards require that each individual property-within reasonable limits-be at the same percentage of full market value. Without such uniformity, there can be no property tax equity.

This is very important because New York State Board of Real Property Services publicly states properties within the same assessing unit may not be uniform. In other words Unequally Assessed. How does a property get unequally assessed? It is simple, it is being assessed for something it does not have. Assessments are done by a mass appraisal system where some criteria may not be added, subtracted or known.

Steps to follow:

1. On the RP-524 form, complete page one. On page two, put a check mark on the line for #7. On page three under Unequal Assessment, put a check mark on the line for 1b. Once you have completed the comparison process you can fill in the blanks for #3 and#4. On page four, complete Part 4 (if necessary). Complete Part 5. Do not sign Part 6 unless you are completely satisfied with the stipulation. If you sign the stipulation your grievance is over and final for that year. You can no longer go before a Board of Assessment Review or SCAR. (See links above)

2. You should obtain some similar comparable properties both by recent sales and from your localCounty website. Be sure your comparables are on the same assessment roll. To obtain comparable properties from your County website refer to the section in this website under: Resources - Real Property Tax Data by County Direct Links. (a sample of a Property ID is at the end of this section) To obtain comparable properties by recent sales: Google - Recent home sales in (your town). Try and obtain ten comparable properties from the County website and at least five recent sales.

3. Download this link and click the link Printable PDF version of the pamphlet. This is a publication from the New York State Department of Taxation & Finance and the Office of Real Property Tax Services to estimate the market value of your home by using their recommended way to compare your property to other properties for assessment purposes. By following this process you can establish your own estimated full market value of your property. (a sample of a comparable spreadsheet is at the end of this section).

4. Download a blank comparable property spreadsheet.

Download Blank Argument Sheet to Use for Each Comparison Property- (PDF)  

Download Blank Worksheet - Excel Spreadsheet    

5. Fill in the sections of the spreadsheet above Adjustments with the information from the comparable properties you obtained from thewebsite. Fill in a separate spreadsheet for the recent sales. 

6. Making adjustments. A guide for making adjustments can be found at this link.  Comparable Sales Analysis Adjustment Formula PDF  

Do not be surprised if you are challenged by the assessor stating the comparable properties taken from the County website are not valid because they were not done by recent sales. New York State law now requires the assessor to display the current estimated full market value of each property on the tax roll. (RP-524 Instructions form under Unequal Assessment #3) It is also on your tax bill and posted on the local County website. It makes no difference if the estimated full market value of a property comes from similar recent comparable sales as shown on your tax bill or as they are shown on the County website. All estimated full market values are calculated from current recent sales by the assessor.

7. Once adjustments have been made, the totals under "Adjusted Sale Price" is the price your property would sell for as compared to that property if all criteria were to be the same at the time of sale. Remove the high and low comparable properties. Add the totals of the remaining comparable properties together and divide it by the number comparable properties. Do not include your own property or the high and low properties. This is your new estimated full market value as compared to others on the same assessment roll. Do the same for your recent sale comparables. If they are less than the assessor's estimated full market value, you have proven unequal assessment by that amount as compared to others on the same assessment roll. This completes the first requirement.

8. The second requirement is to prove a higher percentage of value. To do this you need to take the assessor's current estimated full market value of your property and subtract your new estimated full market from that total. Then take that new total and divide it by the assessor's estimated full market value. You then multiply that amount by 100 and that gives you the higher percentage of value.

Example. Assessors estimated full market value: $884,300.00

     Your new estimated full market value: $654,594.00

     Difference: $229,706.00

     $229,706.00 divided by $884,300.00 = .2597

     .2597 x 100 = 25.97

Your higher percentage of value in the example is 25.97%.  Do the same for recent sales. If your number has a positive value then you have proven a higher percentage of value as compared to others on the same assessment roll.

You have now proven both requirements for Unequal Assessments as stated on the RP-524 Instructions form.

In the case of one-, two- or three-family residential real property, you also have the option of proving that the percentage of full value represented by your assessment is higher than the average percentage at which other residential properties are assessed on the same assessment roll. Once you have established the average percentage at which other residential properties are assessed, you must apply this percentage to the value of your property. If the result is lower than your assessment, you may request that your assessment be reduced to that lower amount.

The assessor or Board may try to counter your argument in these ways.

1. Your comparables are not valid because they are not the same style residences as your property.

Solution: In many cases there are not enough comparable sales similar to the property being grieved and in that case other style residences can be used. Being under oath, the assessor will verify this. Check the assessor's comparable properties to see if all of those are the same style as yours.

2. The adjustments you made for the differences are incorrect.

Solution: No one can have an exact adjustments for an assessment. Assessments themselves are only an educated guess. You have listed the adjustments for your comparable properties and how they were arrived at for transparency. It will be almost certain that the comparables given by the assessor will show no evidence on how adjustments were made or where. When challenged on an assessment the burden of proof is then upon the assessor to prove how the assessment was achieved.

3. I believe you can sell your property for what you are assessed and would most likely sell it for more. If I lower you that much then everyone else on the tax roll will need to make up the difference.

Solution:

  • a) Your property is not for sale. (See Hearing Officer's decision in Resources - Excessive Assessment Grieving - Case Study on this website)
  • b) Nowhere in the Assessor's Manual, New York State Department of Taxation & Finance or the Office of Real Property Tax Services does it state that personal feelings or personal opinions are a determining factor in making an assessment. It is done by current and accurate data.

4. Your estimation of full market value is too low.

Solution: Take the assessor's comparable properties and run them through the same approach as you did yours. Remove the high and low Adjusted Sale Prices. In most cases, the assessor will only provide four comparable properties. You will need to take the property identification number from the assessor's comparables in order to retrieve the important information from the website. If recent sales - type in the address for the property on the website to get that information. The results could be quite significant.

Appearing before the Board of Assessment Review:

What you need:

1. A complete packet for each Board member including:

  • A copy of the Uniform Assessment Standards highlighting 1.6.UNIFORMITY, (so they know inequity exists)
  • Your comparable property spreadsheets for both comparable properties and recent sales
  • A copy of the assessor's comparables
  • A copy of the assessor's comparables as done by the same manner as your comparables
  • A copy of How to Estimate the Market Value of Your Home
  • A copy of the Comparable Sales Analysis Adjustment Formula
  • A separate sheet showing the average results of your comparable properties, your recent sales, the assessor's comparables, the asking assessment amount compared to the actual results and what the higher percentage of value is.

Additional References:

ASSESSOR'S MANUAL DATA COLLECTION - RESIDENTIAL/FARM/VACANT LAND
See section 8.



Please note: This content is only a guideline and a resource for the property owner to use if wanting to grieve their property by this method. It does not guarantee a winning grievance.


Updated February 17, 2020