Property tax reassessments stories are in the news lately, and that will only continue to progress from here. I am going to cut right to it and establish that there is not much of a positive spin on this blog that I can bring to the table. It’s a story as old as time. To quote Benjamin Franklin “nothing is certain except death and taxes.”
Here’s What You Need To Know About Tax Assessments:
(1) Your property taxes are based on the property tax rates that your local municipality will establish with each fiscal budget (town, county, village, school district - for the Rochester, NY real estate market). The tax rate is then applied to the assessed value for your property to calculate annual property taxes owed for each property. Assessed value is also determined by your local municipality. Example: tax rate of 4.5% x $200,000 assessed value = $9,000 annual property taxes owed.
(2) Assessed values are not consistently updated, so homeowners have the benefit of a somewhat consistent feel for what their annual taxes will be for each year. However, assessed values can be reassessed at any given time, without a homeowner’s permission to do so. Notices are sent to homeowners via mail with the news of their new assessed value used to determine their property taxes, like what was most recently delivered to residents in the Town of Penfield.
FOR EXAMPLE: If your current tax rate is 4.5% and your new assessed value is now $300,000 then your new total annual property taxes would be $13,500. An increase of $4,500 or an extra $375 per month.
(3) Concerning amounts of money are in play here for each household out there. Pessimistically, property values have increased significantly lately and the economics of rising costs and municipal budgets that have been at deficits in most cases for years already leaves few alternatives. Unfortunately, the data for recent real estate sales will most likely justify the reassessment of your property.
(4) Every situation is case by case. If your property value assessment increases then you will need to analyze it carefully to determine if you have a worthy case to fight the assessment. Shameless plug but we will be happy to consult with you individually to see if there is a recommendation to fight the assessment and how. Keep in mind that this is a democracy, so you are always able to approach your local government with issues or concerns!
(5) If you are a potential new homeowner, I would argue that one of the most important aspects of the process is to be aware and plan for changes around the assessed value of the property. If you are purchasing a home anytime in the near and distant future, the current assessed value for the property will likely be lower, much lower, than what you are paying for the property. The example above, from $200k to $300k, is common. Make sure you budget for the extra hundreds of dollars per month that are nearly guaranteed to incur at some point and then beyond from there.
Death and taxes, yes. Plan carefully so that there is no death because of taxes. Sorry for the clouds here, we’ll be sure to bring the rainbows and sunshine out for the next topic!
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