WWYD? Challenging a tax assessment on our new home....

15 years ago

I'm looking for advice about challenging the current tax assessment for a home that we just purchased two weeks ago.

Before I describe the situation, I'd like to say that we were fully aware of the higher than average taxes on our new home and that all will be OK if we can't get the assessment reduced. AND, I am fine with paying taxes on the actual value of the home. I'm not looking to get a new assessment at a lower-than-actual-value amount.

Currently, our home is assessed at $702K. The purchase price on our home was $546K. The home was on the market for two months without an offer, and was part of an estate sale. Initial asking price was $599K. After 60DOM price was reduced to $549K. We made our initial offer one week after the price reduction. No other offers were on the table at the time--though I do know that three back-up offers came in shortly after our 2nd offer was accepted. We closed an moved during the first week of June. Petitions to review valuations are due to the county by July 1.

The home appraised at $555K and information about 4 comparables ranging in price from $530K-$629K is included in our appraisal.

Based on all this information, I would at least like to *try* to get our assessment reduced.

There is a short,sweet and easy two page form that makes up the petition. On the first page, I am asked for my estimate of the true and fair value. As the completed form reads right now, I'm requesting that the assessment be reduced to 555K, as that is a little higher than purchase price, and equal to the appraisal, which seems fair. (There is a section for reporting sales prices on comparables which I took directly from our appraisal, and we will also submit the appraisal as evidence)

My question: should I leave that $555 figure on my request? I'm worried the board will want to use a figure somewhere between the current 702K and the 555K I'm requesting. Maybe I should request a valuation at the purchase price, and hope they decide the higher appraisal figure is the fair number?

For what it's worth, there is NO WAY that, even in the stronger economy we had (I'm in a small town north of Seattle) a year or two ago, this house would have *ever* sold for 702K.

Any insight/advice?

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Comments (8)

kit2007
15 years ago
Definitely go with your sales price. That is obviously what the house is worth, since that is all the sellers could get for it. Don't tell the assessor's office that other bids came in after yours was accepted -- that has nothing to do with the fact that the house actually sold for $546,000. Don't help them charge you more by giving them more information than they need.

For the past few years, I made several appointments with our assessor to try and have our assessment reduced. She always pulls out these comps to show that our house is fairly assessed -- despite the fact that there really isn't a true comp for our home since all homes in our neighborhood are semi-customs and each one is different. I should have gone to the review board long ago, but the window for review always comes around the end of the year holiday time (how convenient for them) and we have generally been traveling or too busy to pay attention. This year we have our house on the market. We started our asking price at the amount for which we are assessed, which is 10% higher than last year despite a plunging housing market. We are told we have little hope of getting that price -- we'll probably have to come down another 8-10%. Believe me, when that happens I am sending her a letter showing the actual sales price. If I can't help us, I will at least help our buyers.
disneyrsh
15 years ago
I agree, go with the sales price. Assessment's are nothing more than an educated opinion; the sales price is what the MARKET says the house is worth.

I've sent a challenge in for this house twice. First time it was reduced to what we paid for it; second time, well, we'll see...
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iread06
15 years ago
We just successfully challenged the assessment for our house. Before the meeting we looked at the county's tax property cards for all the houses that sold in our neighborhood in the past year. We carefully studied them and compared them to our house so that we could respond to the assessor's "comps". "Yes, but that house is all brick." "That house has 3 baths, and ours has only two." It worked for us. Good luck.
tx_happy_camper
15 years ago
You've got an easy win situation. All you have to do is show how much you paid for the house and they will drop the assessment down to that amount. You may have to prove that it wasn't a distress sale or family sale. Good luck.
sweeby
15 years ago
We were able to get our assessment lowered to our purchase price despite an appraisal and market comps supporting more than $100K more. (Similar numbers to your own.)
If there are 'condition' or property age issues that are relevent, photograph them and bring those along.
heimert
15 years ago
Agree on going with sales price. It depends on local rules, but generally an "arms length" transaction, which it sounds like yours was, is the best basis for an assessment.
kathyg_in_mi
15 years ago
When we bought our retirement home our assessment was quite a bit higher than the actual sale price. We took our case to the local tax assessor and lost.
We then went before the Michigan State Tax Tribunal and we did get it lowered to what we paid for it.
Do your homework. Bring in copies of everything and be sure to have proof of your sale price.
Kathy G in MI
sadiesmom
Original Author
15 years ago
Thank you. I appreciate the info and advice. I'll redo the petition to request that the assessment be changed to the purchase price. I have more hope after hearing from you all.

Theresa