Your Town Does a Revaluation and You Disagree with your Assessment - What to do?
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.
One is if the selling prices of similar properties rise and no revaluation is done then the equalization rate will fall by the average increase of the market. New York State would like to keep all equalization rates as close to 100% as possible. This is not entirely a bad thing because as the equalization rate drops, so does your STAR credit.
An assessing unit or town with an Equalization Rate of 100% may have a school tax rate of $13.00 per one thousand dollars of assessment. The same assessing unit or town with an equalization rate of 50% may have a school tax rate of $26.00 per one thousand dollars of assessment. The amount you would pay in taxes would be about the same.
Both the property's "Full Market Value" and "Assessed Value" can generally be found on your local County Real Property website, on your tax bill or on the latest tax roll.
Real Property Tax Law states that you can only grieve the current tax assessment. The problem a property owner faces is that it is March when the "impact notices" come out and it is the current tax year. All of the available comparable properties are from the previous year and will not be allowed when grieving your assessment. Some towns will post on their website the properties that had increases due to a revaluation but not many. You can still do most of the work using the previous year's values to find out which properties are the most comparable to yours. I have found that if the properties were comparable for the previous year, they are most likely still a good comparable property after a revaluation for the current year.
Start by going to our "Resources" section on our website.
- Follow steps 1-6 under "Excessive Assessment - Grieving By" if you intend to have an Informal Meeting with your assessor.
- After you have your list of comparable properties you can ask the local assessor what the current year's assessments are going to be for those properties. You may or may not receive them. If you do, you can enter the new values into your spreadsheet, follow the same steps and see if your assessment is fair or excessive.
- If you do not receive the current values, you will need to finish the process under Step 7 and take your grievance to the Board of Assessment Review after you receive the new values from the Tentative Roll on May 1st.
It is important to note that comparable properties do not need to be the exact same style as the property being grieved as long as adjustments are made to make them equal as if they were to be sold. Many assessors will tell you they do but that is incorrect information. There is nowhere in Real Property Tax Law that states comparable properties must be the exact same style as the property being grieved. Comparable properties may also come from adjacent towns or tax rolls as appropriate Market Values may cross municipal boundaries for Excessive Assessment. For Unequal Assessment the comparable properties must be from the same tax roll.
From my experience, the most common problem you will face will be from the lack of training assessors and Board of Assessment Review members receive. New York State Department of Taxation & Finance along with the Office of Real Property Tax Services will explain to the property owner the process on how to grieve an assessment but then fail to train assessors and Boards of Assessment Review on how to understand the same process. When not understood, the assessor is always presumed to be correct.
If you do not receive satisfaction up to this point, the resource we provide on this website can show you how to take your grievance to the Board if Assessment Review and to Small Claim Assessment Review if necessary. It may be beneficial to read our Case Studies as you prepare to take your grievance to the next step.