Disputing a tax assessment?

[Colleen27]

Has anyone ever done it? How was the process? Were you successful?

The state equalized value in Michigan is supposed to be equal to half the cash/market value of the home, and that is the basis for calculating the assessed value for tax purposes. Because we just bought our home last year, the two are equal and this will be the starting point for the taxes we pay for the entire time we own the home (increases in assessed value are indexed to inflation & capped at 5% per year, so as not to tax people out of their homes during times of rapid appreciation).

We just received our first assessment notice yesterday, and they set our SEV at more than we actually paid for the house! Basically they're saying that this house is worth three times what we spent on it, even though there are several comparable homes in the neighborhood currently on the market for about what we paid. I think we should contest the assessment; DH doesn't think it is worth fighting, since our taxes are quite low anyway. But I just can't see accepting taxation based on a market value of 75K when we just bought the house for 25K.

 

[Cheshire Figment]

It is worth doing, especially for long-term results.

The easiest place to start is asking the Assessor's Office. They will advise you of the procedures and/or forms that are required. And they would be a lot more accurate than anyone on this board would be.

 

[tmccullough]

I'm in the process of appealing mine now. Since we refinanced last year, they are accepting the appraisal we had done as proof of the value of the home. Where I live, our house is only assessed once every three years by the state taxation department and we're basically stuck with it for 3 years if we don't appeal it within 90 days. I would contact your local tax office and they can tell you when you can appeal it and if you can appeal it at this point or if you're too late. HTH!

 

[tzolkin]

We bought our house (almost 7 years ago) for less than what it had been assessed for. The assessment was automatically adjusted to what we had paid. Obviously it wasn't "worth" the original amount if no one had offered to pay that much for it.


Not the same situation, but here's our experience of contesting our assessment...

Last summer someone decided that the values of the homes in my town and two others were too low, so they hired a new person to re-assess all the homes. We live in one of (the?) poorest counties in NY, but there are two college towns where the houses are very expensive. Apparently these outsiders assumed there must have been a mistake since the average in my town was maybe $50K and it was over $200K in another town in te same county. So instead of actually looking at the houses and neighborhoods, they just adjusted all homes in the less valuable areas.

Our house was assessed at over 3 times what we paid for it.

This was a preliminary assessment and there was a number you could call on the form to set up an appointment to dispute. Basically everyone in the town went to dispute theirs. They had 4 people at different tables in the town hall meeting with homeowners for 15 minutes at a time. Basically the woman just took down some information about why we thought our house wasn't worth that amount and then the assessor re-evaluated all of them.

During the meeting, we asked to see what homes he had used for the assessment and not one of them was even in our town. Our main argument was that there was no way we could sell our home for what they were trying to assess it at. Within 6 months of the assessment both of my neighbors homes had sold for half of what ours was being assesed at.

We recieved a letter a few months later with the new assessment. It was more than what we had paid for the house, but significantly less than what the prelimnary assessment had indicated. It was exactly the amount we had suggested was a fair market value for our home.


Good luck.

 

[ccgirl]

My in laws did this and the town ended up re-assessing all of the neighbors homes at a higher rate rather than decreasing theirs. Needless to say, the neighbors were not happy. SOmetimes people get good deals on houses. Especially with short sales and foreclosures. However, keep in mind that appraisal and assessment are two different things. Appraisal is the fair market value of the home while the assessment is a dollar value the city/towns put on homes using their formula. So, you very well may have gotten a great deal on the home but that doesn't mean you are going to pay less taxes. Good luck..

 

[daughtersrus]

We appealed ours the last two years with success!

For us, we either had to find similar homes in our area and compare our assessment to what they sold for. The problem is that the county assessor will not consider any property that sold as a foreclosure or short sale. That was impossible for us since the only homes that sold were foreclosures.

The other option was to find homes that were similar to ours in the area and compare our assessment to theirs. I was able to find two homes that are the exact model as mine (we're in a subdivision) that were assessed lower. The first year the assessor just lowered ours but told us it was a "one time offer". I didn't want to argue with him so I accepted it.

Last year, our assessment jumped back up to where it was the year before. I went right back down to the assessor's office with the property ID#s for the same two houses. After some talking between the assessor and his staff (I couldn't really hear what was being said), a girl came out and said that they would lower it again. Once again, she told me it was just for that tax period.

Just a few months ago, I got official notice that our taxes that will be due in June and Sept are still at the reduced amount. It appears that they county went through and permanently lowered the assessed values of everyone that appealed. When I say permanently, I mean that I won't have to appeal again until our subdivision is reassessed. When they do the routine reassessments, they go back 3 years and see what similar homes have sold for. There are areas in town where all of the home values have been lowered based on the sales. The housing slump is just now starting to impact our assessed values.

Of course, the taxing bodies still need the money so I'm sure that they will just increase their tax rate to make up for what they are loosing from the values being lowered.

I found all of the information that I needed on our county website.

 

[thistle922]

Out of curiosity, what city are you in? I'm in MI and research property taxes for title companies...I am curious as to how the heck this happened to you, especially here in MI! I know that we just got ours and took an 11K hit to our SEV and taxable...we're down over 30K in the past 3 years.

If you don't want to broadcast where you are to all of DISboardia, feel free to PM me. This really piques my interest given what I do for a living..LOL!

 

[puffkin]

I appealed mine last year in PA and I won. I didn't get it quite as low as I thought it should be, but pretty close. I had to provide the sales sheets for 3 comparable homes in my area that sold within the last 6 months (I contacted a realtor who sent them to me). I then went to a hearing and the panel asked me a few basica questions about my home (finished basement, #bedrooms, etc). They set the market value at the level they then thought and the assessed value is a set percentage of that (roughly 65%). I was pretty happy and it was a lot easier than I thought.

The first place to start would be your county assessment office to determine their process. At least here in PA, each county is different. My county you can only appeal in July and August.

 

[Jennifer in MI]

We've done this two years in a row and we're planning to do it again this year. The first year, we had just bought the house and it was WAY overvalued. So, we had our agent send us all the comps for the last 6 months. Dh presented them with about 5 other properties about the same size as ours. He also listed their price/sq. ft. The first year, we were denied and we challenged it to the state level. Our city called us back and offered us a deal and we took it. It was fair.

The next year, the city said that our value INCREASED by over $25,000!!!! Can you believe it??!! Needless to say, we challenged it again. They had run out of times because so many people were challenging their assessment. This time we won right out.

This year, we tried to refinance. We were denied as the value of our house dropped over $100,000 in two years. We're going to go in with that assessment when we challenge the taxes this time.

Good luck! We're in MI too and it's hard to see our values keep decreasing. This is one time of year I look forward to saving some money!!

 

[disneymarie]

Has anyone ever done it? How was the process? Were you successful?

The state equalized value in Michigan is supposed to be equal to half the cash/market value of the home, and that is the basis for calculating the assessed value for tax purposes. Because we just bought our home last year, the two are equal and this will be the starting point for the taxes we pay for the entire time we own the home (increases in assessed value are indexed to inflation & capped at 5% per year, so as not to tax people out of their homes during times of rapid appreciation).

We just received our first assessment notice yesterday, and they set our SEV at more than we actually paid for the house! Basically they're saying that this house is worth three times what we spent on it, even though there are several comparable homes in the neighborhood currently on the market for about what we paid. I think we should contest the assessment; DH doesn't think it is worth fighting, since our taxes are quite low anyway. But I just can't see accepting taxation based on a market value of 75K when we just bought the house for 25K.

I would do it, it is only going to continue go up. The way the houseing market is now, I would start with an assesment done from someone you know is professional.
The documents I filed were at the courthouse. We had a county wide assesment done. Not only did they over asses the home, rais taxes triple, then they raised the county taxes by 15%.

I paid about $350 or more? Can't rember for sure for the assesment. The filing fee at the courthouse was about $40 for the informal assesment. They did nothing to help (outside agency hired to screw us) I went to a formal hearing. Nothing done again. I requested a hearing at the courthouse. Mediation called and I was able to get the amount of my appraisal. It was the same as I had been paying. The increases I had added were in line with the value of my home.

So, I would do it. Unless the money for the appraisal is more then the taxes would be increased over the next year or so.....
Good luck.

 

[msmayor]

I don't dispute that getting your property properly assessed is the right thing to do...and every homeowner has the right to a fair and reasonable value for the computation of their taxes.

I have to wonder though...as appeals rise and towns end up lowering assessments (and therefore lowering individuals' taxes)...are the residents going to then complain that services are being cut too much?

Lets face it: every town needs a certain amount of money to provide reasonable and adequate services to its residents. The less tax money in the coffers, the more cuts that have to be made. Its a delicate balance.

You may win the lower assessment now...but don't be surprised if in a few years your tax rate increases by a lot in order to "make up" for the lost money from the lower values. One way or another, you'll end up paying in either higher taxes or fewer services.