<font color="blue"> if you paid $100,000 for a $60,000 property then it's no longer a $60,000 property; has to be worth $100,000 or you wouldn't have paid it </font color>
That's certainly one way of looking at it. Anything is worth it's fair market value. Fair market value is the price a ready, willing and able buyer knowledgable of the marketplace will pay that a willing seller knowledgable of the marketplace and under no outside constraints will accept. Unfortunately, there's no allowance for uninformed buyers or sellers.
Another way to look at is has to do with the appraisal process itself. If like properties all sell for $60,000 then it's foing to be appraised for $60,000. You paying $100,000 doesn't change that any more than paying $20,000 would.
If there's a good appraiser at work and there's that one aberration in the comparable sales like the $20,000 sale I illustrated above the appraiser will follow through with the buyer and/or seller to determine if there were extenuating circumstances affecting that sale. Examples of those would be a sale to a relative, other non-real estate items involved in the sale or dismissal of outside debts, etc.
If those exist, then the sale is no longer considered a comparable sale. If none exist, then the aberrational sale goes into the mix. With three comparables of $60,000 and the one of $100,000 then next like property would appraise for $70,000 (the average of the four comparables).
Certainly this is an oversimplified example. There are a number of other factors which go into an appraisal.
Lets Talk about crying [img]/forums/images/icons/blush.gif[/img]
I bought 5 acres here in Tenn. in 1997. My taxes were $50 for the next 2 yrs, then it went up to $54 in 1999. Went up to $58 in 2000 then the state came in and assessed the whole county because the county had grown by 30% in one year [img]/forums/images/icons/shocked.gif[/img] My taxes jumped from $58 to $126 in one shot last yr. Thats about 110% increase [img]/forums/images/icons/mad.gif[/img]
I've since finished building my house and I'm figuring I will be paying around $350 +/- [img]/forums/images/icons/crazy.gif[/img]
Now I realize that this is pennies compared to a lot of you, but keep in mind that I'm looking at 700% increase in property taxes based on the original tax base I was paying. [img]/forums/images/icons/frown.gif[/img]
Can you imagine having to pay 700% more than what your paying [img]/forums/images/icons/confused.gif[/img]
Yes, you are looking at a 700 percent increase, but are you not adding a house to the property. it would appear that you are comparing apples to oranges here.
pete - dont' desapair just yet - cowboydoc may be correct in his state but not in NY. I'm just down the road from you and went through the exact same thing. Got assessed for our purchase price, wasn't too happy so went around and looked at a bunch of comparable properties in the area. Went to the informal grievance process where you go before a small board and lay out your case. The assessor is also there. They had there number and I had mine and we kind of met in the middle. Not what I was at before but better than if I hadn't fought it. They'll come down some without too much effort.
Gerard, if you got a reduction from your purchase price you are the luckiest guy in the state. Since the state decided back in 95 that reassessment was needed evry 6 years, to increase borrowing power, purchase price is supposed to be absolute = to minimum assessed value for 2 years after purchase. They even have a list of exemptions that allow assessors to ignore purchase price, such as property bought at auction, and other "distressed" sale transactions.
As the state sheds costs onto countys, county & town politicians need a method of stealing more dollars without raising taxes, and assessment is the way. It's a perfect method for politicians because most people pay their tax as a part of their mortgage, and have little idea what their assessment is about.
Guess I got lucky twice then, once on the house and once on a three acre parcel we closed on after the house. Got that reduced to less than we paid too. Course it still went up 300 percent from where it WAS at but that's still better than a 400% increase!! I think they are willing to come down a little pretty easily because market conditions can vary so much and just cause you paid $150,000 6 months ago for a property doesn't mean it' still worth that. I still think if you do a little homework and get some good comps that are less than you're assessed at, you should be able to get a slight reduction but then every town board is different. Maybe mine's a little more reasonable than most [img]/forums/images/icons/grin.gif[/img] [img]/forums/images/icons/grin.gif[/img]
Yes I know I can't really compare what I'll be paying since building the house, but they did increase my taxes 110% in one yr just before I began building [img]/forums/images/icons/crazy.gif[/img]
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