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Hello, This is a real estate tax question. I bought my house

Hello, This is a real...
Hello,
This is a real estate tax question. I bought my house for 261K in 2007. I want to lower my real estate tax but on my county tax bill it says that my house is assessed at 106K (even though county records show the actual price I paid). I had the house reappraised in early 2011 and it came in at 215K. Do I have a case or would I just shoot myself in the foot failing a review request?
My millage is 40.06
Thank You,
Art
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Answered in 11 minutes by:
9/15/2012
Dave CPA
Dave CPA, Accountant
Category: Tax
Satisfied Customers: 840
Experience: Vast knowledge within the accounting/tax industry
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Hello,

What you have is the difference between the assess value for taxes and the fair market value (real value) of the property.


The assessed value is what the property taxes on your home will be calculated on, even if the market value is much higher. Understanding the difference between these types of value is important, especially if you will be buying or building a home and need a lender for a mortgage. It is also important to note that often the market value of a home does not conform to the assessed value of the same home.

Assessed value is the value of a property as of a certain date (usually January 1st) according to the tax rolls of your local government jurisdiction (county or city). This value can be higher or lower than market value based on the assessment ratio, which is a percentage of market value.

Market value is the most probable price as of a specific date (the date of sale) that a property with all its rights should sell after reasonable exposure to buyers in a competitive market with the sellers under no undue duress (meaning the sellers aren't forced to sell).

Loan applications are part of the mortgage process, and the lender will compare the assessed value vs market value of the home. For the lender, the market value of the home is the most important of these two amounts, because this is the amount that the lender will use to value the home.

Yes you still have a case to try and lower your taxes. You should look at the county records for similar homes in your area and see if the assessed value is higher or lower than yours. If you have a house that is just like yours and you have a higher assessed value then you have a case that your assessed value is too high. Most county's have this information on comparable properties available online for you to review.

Let me know if you have any questions.
Dave CPA
Dave CPA, Accountant
Category: Tax
Satisfied Customers: 840
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