2014 property tax notices will be sent out no later the end of February 2013. Property owners should be prepared to move quickly on an appeal since there is only a scant 60 days from the date the notice is mailed to file a less expensive and more effective administrative appeal (if you do miss the 60-day deadline, a direct appeal to the tax court is available until December 15th). An appeal is generally warranted when the assessor over-estimates the value of your property (the valuation date of all property is January 1st), though property owners may also challenge the classification of the property (i.e. your property is listed as residential though it should properly be classified as vacant or commercial). Potential claims for overvaluation can be supported by a current appraisal, recent comparable sales or based upon the income generated from the property.
Keep in mind that, generally, there are two major basis’ that provide grounds for an appeal:
1) Recent Purchase or Appraisals – Purchases made on the open market constitute persuasive evidence of actual fair market value and can be used as to challenge the assessor’s estimate d valuation. It is important to keep in mind, however, that sales stemming from bankruptcy or an REO sale alone are generally insufficient to serve as a basis for appeal (combined with an appraisal, however, distressed sales carry more weight). Similarly, recent appraisals of property, regardless of the reason they were commissioned, provide a great tool upon which to appeal your tax notice. The closer the purchase or appraisal occurred to the valuation date, the more weight they will bear in an appeal. So, properties that have been recently purchased and/or appraised are ideal candidates for property tax appeals when the assessor’s valuation is considerably higher than the actual purchase price or appraisal valuation.
2) Actual Income – This basis of appeal generally applies to commercial and/or investment properties. Many times, assessors over-value the worth of an income-generating property, especially since assessors have minimal access to a company’s financial records. This overvaluation is especially true in times economic hardship. If you own a business and the valuation of your property (and accordingly, the taxes assessed) are vastly disproportionate to the actual income generated by the property, you can use your financial statements as a basis for a reduction in property value.
Although these are the two most utilized basis’ for a tax appeal, many others exist (including a change in use of property, loss of tenants, construction on structures, etc.). Please contact us and/or your own personal tax expert if you feel you may have grounds to challenge your property tax notice, you never know what savings may await you.
If you believe your property has been overvalued for tax year 2014 (Values will be included in your notice and subsequently can be found on your county assessor’s web site), please contact Evan Bolick to discuss a potential claim for overvaluation. ebolick@roselawgroup.com.
