noob to the whole property tax thang.....

[vecnadeit]

So, can some one explain the importance of my property taxes? they went up from 27K to 67K, but that's probably because there is a house where last year there was only land. Is that too high? How do I know what to argue?

*confused*

Can someone please explain it all to me?

Comments

[cowboyzydeco]

I wish I had some advice to give you, but I had zero success arguing mine my first year of ownership. (This is your first year, right? I forget.) In my case, the problem was that the Homestead Exemption takes a year to kick in. (If you haven't filled out your Homestead Exemption, do it NOW. They cheerfully took mine several weeks late. Can't remember the deadlines now.) So they royally ream you during that first year, before you're exempt from rapacious assessed property value (and thus property tax) increases.

I'm assuming you either mean taxes of $2,700 to $6,700 (which seems like the right ballpark), or taxes based on property values of $27,000 to $67,000 (small house?). If you can afford a mansion that has $67,000 in property taxes (and is therefore worth several million dollars), you can afford to hire a tax consultant to work it out for you!

Anyway, here's what happened to me. You might be in the same boat. (Forgive me if my terminology is rough- doing all this from memory.) The Homestead Exemption effectively limits the amount that your assessed property value can be increased (at least for purposes of tax evaluation) each year. So, if the previous owner was Homesteaded (it was his primary residence, and not a rental property owned by a third party living elsewhere), and the property values in the area have been increasing steadily, it's likely that the tax assessment property value (the value used to calculate the taxes) and the actual property value (the value used to determine how much you actually paid for and insured for the house) are fairly far apart. This is doubly true if the previous owner was a senior citizen (they have their own exemptions that limit assessed property values, and thus tax increases). So, once that exemption expires (by transferring the property to a new owner), they take the opportunity to bring the tax assessment property value more in line with the actual property value.

Unfortunately, this makes it hard to fight if you recently purchased the house at something close to it's actual value. In my case, I purchased my house at ~$136k (which was a little under the actual property value) and the tax assessed value was jacked up to something like ~$130k in the first year. (Doing this from memory here.) That was a 20% increase in value in one year. I was shocked, too, as it didn't seem like my august presence was sufficient to increase the property value by a fifth in one year!

The problem was I couldn't really argue that the property was improperly assessed. I just paid that much for it! I couldn't argue "Oh, well, see I was stupid, and paid over 20% more than the property was worth... Oh, and the bank was stupid, too, and gave me 20% more in mortgage than it was worth."
(Continued next comment)