If you haven't received a letter in the mail from your county tax assessor on your home yet, you may may want to call and inquire because it could be detrimental to your mortgage payment. In my county (Mecklenburg County), the county is reevaluating property tax values. What homeowners need to know is that this could drastically effect your current escrows that your mortgage company sets aside for your tax bill if you aren't paying attention to what the county values your home at. Based on my review of 20+ properties, I've noticed that the county has assessed these homes at a much higher alleged value than they were in the past. This means that if you don't take action and send in the informal appeal letter (now extended to March 14) with your assessment of the value then you acquiesce to the value that they put on your home.
Here are the Pros vs. Cons of a higher tax value: Pros: To me, there really aren't any however in speaking to a lot of our clients they have a perception that its good to have a higher tax value because when they sell their house potential buyers will look at this figure. I disagree. If the buyer has a great real estate agent they will help them understand that tax value has nothing to do with market value (what people will actually pay for your home). Cons: The major disadvantage to a higher tax value is you will be paying a lot more in taxes on your house than you did last year. Also, this will be your new value when they go to reassess as well. In the 20+ properties I just analyzed I found that the proposed value the county was putting on these homes was anywhere from 20 to even 50% more than market value. So, doing nothing is the worst thing that you can do. Remember, in god we trust and to all others bring data to support your value!
Here are the 5 things that you should do to appeal your proposed tax value increase on your home:
1.) Analyze your neighborhood by obtaining valid sold comparable properties up to 6 months back. You can get this information from your agent via the MLS but remember that isn't all sales, its only the ones that were on the MLS. Another data source would be your county real estate website market analysis tools. For Mecklenburg County you can find it here: http://meckcama.co.mecklenburg.nc.us/relookup/ (put in your property info then click the "Market Analysis" Link on the bottom left hand navigation bar)
2.) Prepare a cover letter explaining why the proposed county numbers are not reflective of the true value of your property. In this letter highlight specific recent "Active" and "Sold" comparables to support your findings.
3.) Utilize a tool like Google Maps to map out where your property (Subject property) is in relation to the "Active" and "Sold" comparables that you are comparing to. This is a great way to show visually the geographic relationship between your home and the others.
4.) Fill out the provided county tax informal appeal form following their exact instructions.
5.) Deadlines: Don't miss the deadline for sending this package in for the informal appeal!
Next Steps: When the county responds either in your favor or not, you have the right to a formal appeal in which you can go to a hearing and prove your case with the data that you've found. I hope that you've found this information helpful, feel free to post comments if you have any.
Take care, Mike
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