Tax assessment went down 10% - need advise

vettingApril 26, 2009

I purchased a foreclosed duplex on 4/25/2008

It was originally listed at 170k, but I ended up purchasing it for 135k. The 2008 tax assessed value was 165k. I just got a notice of a assessment change down to 148k. A drop of 17k. Over the last year, I've completly gutted and renovated both kitchens and renovated them with premium materials. I've also done the same with one bedroom and 1 bath. I've also done a fair amount of work on the outside. I am also in the process of having a new roof, gutters, and fiber cement siding put on. If I plan on selling sometime in 2009 or 2010, would it be best if I object to the new value and had the assessor actually come out to value the property?

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Are you saying you'd like to see a higher assessed value?
Why, so you can pay more in taxes?
The assessed value isn't the same as the appraised value for resale.
In what state are you? Knowing that will help other viewers discuss your problem.

    Bookmark   April 26, 2009 at 1:01PM
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I would like the assessed value to stay the same. There wouldnt be much of a drop in taxes. I'd rather have to pay the extra $300 a year than have 10% cut off my assessed value. I live in WI.

Around here, a lot of people base their home buying decesion based upon the assessed value - very few homes are ever appraised.

    Bookmark   April 26, 2009 at 2:45PM
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Most of your questions are answered in this March 2009 Wisconsin Department of Revenue publication, particularly on pages 5 and 6. You also could call the local assessor and talk it over. It appears that the value is set as of January 1, appeals are in May, and a new assessment cycle begins in the summer.

Here is a link that might be useful: Guide for Property Owners

    Bookmark   April 26, 2009 at 3:58PM
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"I would like the assessed value to stay the same."

Once again, WHY?

An appraisal does not use the tax assessment, but the value of comparable house that have sold.

The only person who looks at the assessed value is the tax man, and the higher the value the more you pay in taxes.

    Bookmark   April 26, 2009 at 5:48PM
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"...very few homes are ever appraised."

If that's the case then very few people require a mortgage...does everybody pay cash for their homes in WI?

I ask because an appraisal is REQUIRED for a mortgage. A lender will not use the tax assessment to establish value. That doesn't have anything to do with WI. The secondary market for those mortgages requires an appraisal as part of the underwriting package.

I can't answer your question because I don't understand WHY anybody would want to increase their assessment?


    Bookmark   April 26, 2009 at 6:00PM
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As was said above. Market value has no relationship to assessed value. Assessed values remain the same for a specific number of months or years. Market values can fluctuate by large percentages (see NV, CA, AZ, FL etc.) in a short period of time.
Even if it's a cash sale, most buyers want an appraisal and banks require it.
Be happy with the low assessment, the market will determine the value of your property, when the time comes to sell.

    Bookmark   April 26, 2009 at 6:35PM
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We're all going through the reassessment process in my town right now. Our town is trying to be 100% fair market value. Based on that premise, all of our assessments should have gone down this year as the value in our town has dropped. That has not happened. I think your assessor is rather unique in that s/he recognizes the drop in value overall. It should go up if the market goes up a bit. Are you trying to raise your assessment so that if you decide to sell the condo you won't have to justify your price? That would explain your position.


    Bookmark   April 27, 2009 at 7:18AM
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"Are you trying to raise your assessment so that if you decide to sell the condo you won't have to justify your price? That would explain your position."

Assessed value for tax purposes has nothing to do with trying to "justify your price."

Tax valuations do not matter for the purchase and sale of RE, and are NOT USED as part of the appraisal process.

Any place trying to hit 100% of fair market is going to overvalue some fraction of the properties.

Tie them up in appeals and make them justify the appraisal.

Most places that claim 100% always lag behind the actual market to avoid a flood of appeals.

    Bookmark   April 27, 2009 at 8:37PM
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My town reassesses every year in order to get 100% fmv. It is not an appraisal, and they do make some mistakes in overlooking comps, but generally, I would say they are pretty accurate. A house that sold two years ago for 285K was reassassed at $272K. That is 5.5% less than selling price. It is very close to what it would bring today, imo.
What surprised me was that our town did not lower its mil rate. I always thought when assessments went up to fmv, mil rates went down.

    Bookmark   April 28, 2009 at 7:00AM
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I know exactly what the OP is talking about. Around here, buyers often ask what the tax appraised value of a property is before making an offer. Of course that has nothing to do with the appraised value or how much money the bank will lend, but it does often influence how much money a buyer is willing to offer.

    Bookmark   April 28, 2009 at 3:49PM
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newbuyer2007, you're correct. Homebuyers often look at the tax assessment when deciding what to offer on a home. They erroneously believe that is what the property is worth. If they work with a Realtor, hopefully the Realtor has disabused them of that notion. There may be some states that are close in their tax assessment to the value of the property, but markets fluctuate and like everyone else has said, Market Value has nothing to do with the Tax Assessment. Home buyers and sellers should know that the fair market value of how much your home may sell for is generally based on comps of properties sold in the area, usually within the past 3 months or so.

That also doesn't mean anything either. Buyers and agents often look at the price per sq foot of comps sold in area. I sold a house last year that I totally updated - new roof, a/c, bathrooms down to studs, new appliances, carpet. Home was practically a rebuild. My price for my home was in keeping with prices of homes for sale in the neighborhood, but my price per sq foot was higher than all the comps by $10-12 per sq foot. The other homes on the market helped sell my house. The other homes on the market were in bad shape, outdated, some filthy, but in a nice neighborhood and a coveted school district. My home with everything practically new sold in 8 days.

The value of your property is what a buyer is willing to pay. With the current economy, there may be additional challenges with selling. I would suggest Vetting that you not remodel your home out of neighborhood and check out your competition. Depending on the market in your area, it may be best to wait out the market.

    Bookmark   April 28, 2009 at 9:09PM
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Wowsa I would love for my assessed value to decrease by 10%. Given the high property taxes we pay in WI, I can't imagine being given the 'opportunity' to pay less in taxes!

FWIW, when we bought this time last year, the bank didn't require an appraisal (not totally sure why, but they didn't require it). And, to top it off our ultimate sale price on the home we bought just so happened to be right around the same assessed value - but that was purely coincidental. Upon the reassessment this year, it held it's value.

    Bookmark   April 28, 2009 at 9:44PM
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"Around here, buyers often ask what the tax appraised value of a property is before making an offer."

Lot of naive buyers.

Tax appraisals are invariably lagging actual values to prevent to many appeals of assessments.

In some places the assessment is immediately changed to the purchase price.

    Bookmark   April 29, 2009 at 2:54PM
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When we were selling our house we had a few buyers question why our house was appraised so low. We told them the truth: while everyone else on the block refused to let anyone in to actually see the property, my husband had the assessor in, gave him a cup of coffee, spent a good bit of time with him. They talked about improvements we'd like to do to our house. The assessor told my husband all the things they look for to assess you higher or what brings it down. Our potential buyers were all pleased about the low assessment after that. They could see for themselves that our house was comparable to others in the neighborhood, just had lower taxes. We had no problem selling.

    Bookmark   April 30, 2009 at 1:04PM
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