Is your assessment fair? If not, your property taxes may be too high.

This is the time of year for all property owners to ask themselves this simple question. Or is it a simple question?

In order to answer the question fairly one must know two things about the property:

1. The “Assessed Value” as determined by the Municipalities Assessor.

2. “Fair Market Value” what the property would sell for today if it were made available for sale in the open market.

In theory: Assessed Value is supposed to equal Fair Market Value.

The Assessor’s primary responsibility is to fairly assess all property so that the taxpayer pays only their fair share of taxes.

However, the Assessed Value is periodically reviewed by the Assessor with lapses in time sometimes measured in years. Those years can have seen swings in value, up or down making the assessed value no longer fair.

Fair Market Value is subject to the dynamic economic forces of the marketplace and is subject to change.

Therefore, Assessed Value does not always equal Fair Market Value but there should be a reasonable (5%) correlation between the two.

If your Assessed Value is within a 0 to 5% range of Fair Market Value then your property taxes are arguably fair.

If your Assessed Value is greater than Fair Market Value and exceeding a 5% range then your taxes are too high.

When your taxes are too high, two things occur. First, you will pay more than your fair share in property taxes every year. Second, when you sell your property, you will likely receive less than Fair Market Value since properties with higher taxes than competing properties tend to be less desirable.

These 2 things are not fair to a property owner and there is something you can do about it.

The “Burden of Proof” rests with the property owner to take action and to prove the Assessed Value is not fair.

Fair Market Value will need to be determined and can be supported by any one of the following: recent activity of the property in the market, recent appraisal and or recent comparable or “like” properties that have sold. Note: the further you go back in time the less accurate the information will be relative to today. It is always recommended to discuss timelines with the assessor to maximize any due diligence.

First, property owners should try to arrange an informal review with the assessor. Generally it is easiest to coordinate an appointment well in advance of “Grievance Day.”

If the Assessor does not grant the meeting or if the Assessed Value is not adjusted as a result of the meeting then the property owner can and should file a Formal Grievance.

The deadline for filing a formal grievance is quickly approaching is generally in May however you should confirm with your local municipality.

A formal grievance form can be obtained from the Assessor’s Office or by visiting:

http://www.tax.ny.gov/pdf/current_forms/orpts/rp524_1117.pdf

Please check with the Assessor’s office to confirm the number of full copies they require when submitting all documentation supporting the formal grievance.

You can represent yourself or you can appoint a representative to represent you before the Assessor or Grievance Review Board. This must be reflected on the RP-524 form

Again, this is the time of year for all property owners to ask “Are your property taxes fair or too high”?

If you are still unsure how to resolve this question or what to do next, contact your REALTOR today for professional guidance.

For more information please see: http://www.tax.ny.gov/pit/property/contest/completegriev.htm

Contributed by: Ken Currie, RE/MAX