Tax Assessment, Don't fight it!

Real Estate Broker/Owner with Northern Virginia Homes - FRANKLY REAL ESTATE Inc

Frankly, with prices dropping, it might be tempting to try to fight your tax assessment. Prove to the government that your place is worse LESS than tax assessment. Why not! Free money right? Use that cash for Disney World.

Wrong! Unless you are part of a collective effort to reduce the tax assessment for an entire building or county, it can hurt you if your taxes are $30,000 lower than a nearby similar house.

Why? Buyer agents still use the tax assessment as a benchmark when comparing 2 properties. If I see a property for sale with a $500,000 tax assessment and it is selling for $520,000, I don't care. But if I see another similar place sold for $490,000 and it had the same $500,000 tax assessment, 9 times out of 10 the interior sq footage and other valuations will be the same.

Obviously a buyer agent won't use this as their ONLY tool, but it might be on the shortlist of 5 ways that they might value a property.

So don't go running to the tax man to drop your tax assessment from $500,000 to $450,000 in order to save about $500 a year ($50,000 at about 1%) unless you are SURE that you will be living there for well over 10 years. Otherwise it might have an effect on your resale.

A lower effect. 

Written by Broker Frank Borges LL0SA- 

 p.s. Please report typos.

Comments (10)

Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate
Interesting Frank. I have had many people run to the assessing board with comps, but so far NO ONE has had a reduction. They say they are waiting on the state. Yet, they have the power to change it.
Sep 25, 2007 09:48 AM
Dale Campbell
Virginia Real Estate - Mechanicsville, VA
Great point.  As it happens, many times it costs you a dollar to try to save a nickel.
Sep 26, 2007 12:22 AM
Mike Jaquish
Realty Arts - Cary, NC
919-880-2769 Cary, NC, Real Estate


I am considering appealing my entire subdivision.  120 homes.  The ones I have looked at are averaging at least 10% over-valued.

If I don't do that, I will definitely appeal my own. I'll take the cash.  In Wake County, NC, competent agents know that there is no valid link between tax value and market value.  Especially since we only reassess every eight years.

If I can get 12.5% reduction, it will pay my tax bill for one year of the reassessment cycle. 

Bird in the hand vs. two in the bush???

Nov 28, 2007 11:17 PM
Jesse Clifton
Jesse Clifton & Associates - Fairbanks, AK
I have to agree with Mike.  Some might use the tax rolls to determine price but 9 times out of 10 they're going to be way off.  We're a non-disclosure state so the taxing authority never gets to see earnest money agreements or appraisals... all they have to go off of it the deed of trust, which can significantly vary from actual value.  However, a community/subdivision wide effort at getting property taxes reduced is a good idea in areas where values have dropped significantly.
Nov 29, 2007 08:37 AM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth
Frank, I agree that you don't want to lower your tax assessment if you are planning on selling soon. But if you plan to stay there awhile it makes sense to lower it. Unfortunately sometimes with distressed sales on your block the "others" assessments go down anyway, and you collectively get lumped in with them. Assessments are not market value but they are a starting point for market value.
Nov 29, 2007 11:13 PM
Also doesn't Zillow use Tax Assessment as part of their equation? Let's not get into a discussion about Zillow, but the consumers use it!
Nov 29, 2007 11:51 PM
n d
Naoma Doriguzzi - Virginia Beach, VA
Interesting point... I guess I never really thought of it that it might affect the sale of your home.
Nov 30, 2007 06:59 AM
Karen Kruschka
RE/MAX Executives - Woodbridge, VA
- "My Experience Isn't Expensive - It's PRICELESS"
Frank,  I never really understand why agents use the assessment to determine market value - tax assessments are reflective of the cost of government, not market value, Karen Kruschka
Dec 02, 2007 06:14 AM
FRANK LL0SA Esq.- Northern Virginia Broker .:.
Northern Virginia Homes - FRANKLY REAL ESTATE Inc - Arlington, VA

Hey Karen,

The client is the one more likely to look at it. Heck they think that is the straight value (they also believe Zillow, which is another reason not to fight since zillow uses tax assessments).

But sometimes, like in a condo building, if one place is assessed at $500k and another at $450k, I will take a double take to see why. Oftentimes the place with $50k higher assessment is also 10% larger.

Or, if I see that 5 homes sold for $50,000 UNDER assessment, and one next door is trying to sell EXACTLY at the assessment, I tribute that to the SELLER being stubborn and thinking the tax assessment matters.

Also there are over 200 active listings that right now use the phrase Tax assessment in their remarks.

Dec 02, 2007 08:35 AM
Evidence is not considered

Our tax assessment went up 52.8% in five years, an average of about 10.5% a year. The house was only built five years ago. I provided many documents showing comps in my neighborhood plus reports from on line sites. I was very organized.

All my evidence was all completely ignored! How do I know? I spoke to Jerry Bowers from Wake County assessment who went over their own list of 'comps' which included houses twice our size, that were stand-alone (ours is a townhouse), that had land more than three times ours, and that were sold at the height of the market. Some didn't even have the same number of bedrooms. Every single thing that can go against you to stack the deck.

It is not a fair system at all and when I pointed all this out, he bizarrely told me that real estate in Wake County has gone up 10% every year and continues to do so and, based on his comps, we probably should have gone on considerably more. When I pointed out that newspapers and real estate agents do not agree, he said that they are almost always wrong. Based on my comps, our value has gone down since we purchased the property and significantly, probably at least 15%, maybe even 20% but definitely not increased in value. I can appeal a third time but I can see it is a losing proposition. This property is in Brier Creek.

Oct 19, 2008 10:20 PM