PREPARE FOR PROPERTY TAX APPEALS NOW - CITY ASSESSOR PREDICTS REAL ESTATE TAXES "WON'T FALL" IN 2009 (CITY OF SAINT LOUIS, MISSOURI)

2009 IS TAX REASSESSMENT YEAR

In Missouri, real estate taxes are reassessed in odd years.  Reassessment is the process by which the County (or City) Assessor's Office updates or adjusts the real estate values for purposes of determining value of your home upon which real estate taxes will be assessed.  In reassessing the value of the property, the value is determined as of the January 1, 2009.

SHOWDOWN IN VALUES - ASSESSOR VERSUS THE MARKET DATA

The reassessment of real estate taxes in 2009 should be interesting.  On one hand, the Mid-America Regional Information Systems, the local multiple listing service for the Saint Louis metropolitan area, has published reports indicating that there has been double digit decline in market value between 2007 (the last assessment year) and now.  Similar statistics have been cited by the National Association of Realtors. 

Notwithstanding this data, City Assessor Ed Bushmeyer recently stated that "Overall I expect assessments to be nearly flat with some neighborhoods still appreciating." (Source:  St. Louis Post-Dispatch, December 17, 2008)  This statement comes after the City Assessor's Office increased home values on average by 22.5% in the 2007 reassessment year.

Given the City Assessor's prediction, local Realtors anticipate that the number of tax appeals filed in the City of St. Louis, Missouri contesting the tax reassessment in 2009 will increase by 40% over the number of tax appeals filed in 2007.

UNDERSTANDING THE VALUATION PROCESS

The City Assessor's Office must reassess the "market value" of each residential parcel of land as of January 1, 2009.  "Market value" is defined as the "price the property would bring when offered for sale by a person who is willing but not obligated to sell it, and is bought by a person who is willing to purchase it but who is not forced to do so."  In determining the market value, the City Assessor's Office primarily relies on use of comparable sales to determine the fair market the value.  However, in doing so, the City Assessor's Office excludes foreclosure sales, transfers to charitable organizations, sales between financial institutions, and homes with excessive cumulative days on market.  After identifying the comparable sales to your property, the City Assessor's Office makes adjustments for differences in the comparable sales compared to your property for such factors as location, date of sale, physical attributes (e.g. house size, land, number of bedrooms, number of bathrooms, garage, etc.) and location.  After the making these adjustments, the City Assessor's Office makes a determination of value.  The City Assessor's Office will then mail out Change of Assessment Notices in the first week of April, 2009.

WEIGHING THE BENEFITS OF PURSUING A TAX APPEAL

If you disagree with the determination of value by the City Assessor's Office, you can appeal the change in the tax assessment.  However, before doing so, you must assess whether or not a tax appeal is warranted.  The tax saved based on a $10,000 reduction in the market value is $138.00 per year for two years.  Here are some examples of possible tax saving scenarios: 

UNDERSTANDING THE TAX APPEAL PROCESS

If you elect to proceed with a tax appeal, there are three steps in the tax appeal process.

Step 1 - Informal Appeal to Assessor:  If the information used by the City Tax Assessor's Office is incorrect (e.g. wrong square footage), you may want to request an informal meeting to review and verify the information upon which the tax assessment is based.  These informal appeals are scheduled by appointment only and the request must be made within fifteen (15) days of receipt of the Change of Assessment Notice.  To schedule an appoint regarding residential property, contact the City Assessor's Office at 314-589-6581.  All informal appeals must be resolved by May 1, 2009.  The informal appeal is an opportunity to learn how the assessment was made, what factors were considered, and what type of records or data were used or considered by the City Assessor's Office in determining the value of your property.

Step 2 - Appeal to Board of Equalization:  If there is a disagreement regarding the value of the property (as opposed to an error in property information), it is unlikely that the informal appeal will resolve the matter.  You may appeal the change in assessment to the Board of Equalization by requesting a Notice of Appeal form from the Board of Equalization in person or by writing to the Board of Equalization, City Hall - Room 120, Saint Louis, Missouri 63103.  The Notice of Appeal must be filed no later than the second Monday in May (May 11, 2009).  If you fail to file the Notice of Appeal by this date, you will not be able to challenge or contest the tax assessment.  After the appeal is filed, the Board of Equalization will conduct a hearing where you will have the opportunity to submit evidence regarding the value of your property.  These hearings are conducted in an informal manner with no rules of evidence and no transcript of the testimony. You may, but are not required to, appear in person.  If you elect not to appear in person, your evidence will be submitted based on the statement, opinion of value and photographs submitted by you.  The Board of Equalization will then issue a decision determining the market value and assessed value of your property.

Step 3 - Appeal to State Tax Commission:  If you are dissatisfied with the determination made by the Board of Equalization, you may appeal the change in assessment to the State Tax Commission.  The deadline for filing the tax appeal for properties in the City of Saint Louis is August 15 or thirty (30) days after receiving the decision from the Board of Equalization.  The State Tax Commission will then appoint an independent hearing office to handle the tax appeals.  The hearings are conducted under the rules of the State Tax Commission.  As opposed to the informal procedures of the Board of Equalization, the hearings are conducted structured procedure and include the right to discovery, right to call and cross-examine witnesses, and the transcription of testimony.

HOW SHOULD I PREPARE FOR THE TAX APPEAL

Given the time deadlines and volume of tax appeals anticipated for 2009, you should start preparing for your tax appeal in January, 2009, by gathering the information necessary to start the tax appeal.

Item 1 - Photograph the exterior and interior of the home.

Item 2 - Prepare a floor plan of the home showing the room dimensions.

Item 3 - Prepare a list of the physical characteristics of your property such as lot size, square footage of living area, number of bedrooms, number of bathrooms, description of the interior finishes, description of garage or parking area, roof condition, type of electrical service and wiring, type of plumbing service, etc.

Item 4 - Prepare a list of repairs to be completed on your home.  Take photographs of the condition in need of repair.

Item 5 - Prepare a list of off-site conditions that may impact the value of your property such as high volume street, overhead wires, highway noise, airplane noise, etc.  Take photographs of these off-site conditions.

Item 6 - Identify possible comparable sales from your neighborhood.

Item 7 - Obtain copies of the original disclosure statement, HUD-1 closing statement, appraisal and survey from your original purchase of the home or the refinancing of any loan on the home.

RETAIN A REAL ESTATE PROFESSIONAL TO REPRESENT YOU, PREPARE WRITTEN BROKER'S OPINION AND PROVIDE EXPERT WITNESS TESTIMONY AS TO PROPERTY VALUE

Although you can represent yourself before the Board of Equalization, it is advisable to retain a qualified real estate professional and/or attorney to assist you with the tax appeal.   

Ryan Shaughnessy is a licensed attorney and real estate broker and is a former hearing officer for the Board of Equalization for Saint Louis County.  Mr. Shaughnessy writes extensively on real estate and sales related issues.  The comments in this post relate only to the deadlines and procedures for tax appeals in the City of Saint Louis, Missouri.  Deadlines and procedures vary based on the classification and location of the county.

To request more information on our property tax appeal services, please contact Ryan Shaughnessy / PREA Signature Realty by sending an e-mail to ryan@PREASignatureRealty.com.

END OF BLOG POST______________________________________________

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Review Note:  The opinions and statements contained herein represent my personal opinions and observations.  These blog entries are not reviewed, endorsed or approved for publication by Gilded Age, L.L.C., Gilded Age Sales, L.L.C. , Preservation Real Estate Advisors, L.L.C. or any affiliated companies.

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