Fall is in the air, the kids are back to school, and real estate attorneys are busy closing on spring and summer home contracts. Those that follow the local real estate market can find data on real estate sales through their trusted realtor, a local newspaper, or even popular real estate apps. So why might established homeowners want to pay attention to this fall’s real estate sales?
The answer? Each year, your municipal tax assessor assesses your property based upon the value of the real estate as of October 1st. Comparable sales of this summer and early fall, if available, are relevant to your assessment. Your upcoming assessment will be based upon the assessed value of the property as of October 1st. And those of you who qualify may want to try to lower your taxes, after the new year, based upon these comparable sales.
Even though your property will be assessed as of October 1st, your Notice of Assessment is not mailed until on or before the following February 1st, and most appeals are then strictly due on April 1st, with very limited exception.
Because the Notice of Assessment isn’t received until next year, many homeowners contact me with questions about appealing their taxes months after the actual date of assessment. They are usually armed with information about recent real estate sales in their area, and statistics about how their home compares to other sales. However, often times, these comparable sales occur well after October 1st. In such cases, if there are comparable sales which are older, but fall before October 1st, the older sales may be more relevant to the tax assessment appeal.
When working with homeowners filing appeals, I always prefer that the homeowner hire an appraiser to provide an appraisal report with an October 1st date of value. There is no equal substitute for hiring a qualified appraiser. At a minimum, appraisers have ready access to databases, a sophisticated understanding of the upwards and downwards adjustments that should be made when comparing one property price to another, and their reports and testimony will be considered expert testimony. The outcome of a homeowner’s appeal may be less favorable in both the assessed value and the settlement terms, if the homeowner proceeds without an appraiser and an attorney.
However, the fact is, many homeowners start by independently watching the market and deciding what they think their property is worth. For those of you who fall in this category, your kids are not the only ones who have homework! Now is the time to be gathering data about the sales that have been occurring in recent months and continue to occur through September. You will need to consider not just the actual price paid for the property, but facts about each comparable property, such as number of rooms, lot size, the type of property, utilities, neighborhood, and condition of the property, and any other factors which a tax assessor and appraiser would consider when valuing your property.
For more information on real estate tax appeal, see my article, “Are you Overpaying Real Estate Taxes”. And, if you believe your property may qualify for an assessment, send me your contact information and Notice of Assessment next February, so that I may discuss with you if your estimated value meets the minimum criteria for appeal.
© Shanahan & Voigt, LLC 2014
BE ADVISED that these comments are not legal opinions and are not to be relied upon as legal advice. If you need legal advice, contact your county bar association; most of which have referral services.