2016 property taxes: Welcome to the world of Proposition 117? by Rose Law Group attorney Evan Bolick

property taxes

Appeals of property tax values may be filed for tax year 2016
Evan Bolick

The Tax Year 2016 notices of value have been mailed out in Maricopa County and the property taxesother counties will follow suit soon.  All property owners have sixty days from the date such notices were mailed to file an administrative appeal of the valuation of the property. The clock for an administrative appeal is ticking.

This is the first year that voter-approved Proposition 117 is in effect and will effect almost all property owners. Proposition 117 changed how property taxes are calculated. Property tax bills are now based solely on your LPV (Limited Property Value), which is set by a statutory formula. The LPV cannot increase more than 5% over the previous tax year’s level, nor can it exceed the amount of your FCV (Full Cash Value). The FCV is the actual assessed market value of your property, and that is the only value that may be appealed. With Proposition 117 in effect, you will now only see a reduction in your tax bill if you can successfully appeal your FCV to an amount that is below the LPV.

Typically, there are three grounds for challenging the FCV:

1)      Market Approach – If the recent non-distressed market purchase price of your property (or surrounding properties) and/or recent appraisal value varies drastically from the valuation in your notice, then an appeal could be warranted.

2)      Income Approach – If your property produces income, and the valuation of the property does not reflect the true amount of revenue or income generated by the property, then you may have grounds for appeal.

3)      Reconstruction Approach – If it would cost less to rebuild a significantly similar structure on your property than the valuation of the property as stated in your notice, an appeal may be merited.

Your case will be even stronger if two or more of these factors exist.

Also, it is always worthwhile to make sure that the assessor’s office has properly classified your property (i.e., vacant, residential, agricultural, mixed use). An improper classification could possibly raise your tax bill.

If you believe your property has been overvalued for tax year 2016, please contact Evan Bolick to discuss a complimentary assessment at ebolick@roselawgroup.com.

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February 2015