Do I Really Have a Case to Grieve my Taxes?

Determining if you have a strong tax grievance case is important, mostly because you want to save more money than what you spend in the process.

When grieving your taxes, you argue that the assessor’s estimate of your property’s value is greater than the property’s actual market value. The assessment is assumed to be correct. The burden of proof is on you and/or your tax representative.

The assessor does not have to be right on the dollar.  The courts have supported the concept of “rough equity” which by common practice in this area is about 5%. So, if the “actual” market value of your property is within about 5% of the assessed market value, it is probably not considered over assessed. 

Since property valuation is somewhat subjective you want to have a strong case. In order to have a strong case the difference between the assessed market value and the “actual” value of your property should be at least 10%.  If the “actual” market value of your property is 90% or less of the assessed market value, then your property is probably over assessed. 

If you have any questions, feel free to call Vergara Fox & Associates at (914) 610-0951. We offer a free, no-obligation phone consultation.

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Proving the Value of your Property

How can you establish “proof” of the value of propertywhen grieving your taxes?

 To successfully grieve your assessment, you need to prove that the property’s actual market value is less than what the municipality states. To establish the value of your property the following information may be useful:

• A credible appraisal of your property
• Purchase price of the property, if recent
• Offering price of your property, if recently listed for sale
• Cost of construction, if recently built
• Comparable sales (these are provided in an appraisal)

Most of the above “proofs” are time sensitive. Most assessor’s consider “recent” within 6-12 months of the valuation date depending on the type of house and market conditions. The valuation date for some municipalities can be up to a year prior to the grievance period. For example, the grievance period for Eastchester is 6/1/2011-6/14/2011 but the valuation date is 7/10/2010.

Are You Over Assessed?

You are over assessed when the Fair/Full Market Value  of your property (the value that your municipality has assigned to your property) is greater than your actual market value (what your house would sell for in a transaction in which no one is under duress to buy or sell).

You can find the Fair/Full Market Value (otherwise known as the Total Assessment or Equalized Value) by viewing the tentative roll put out by your assessor at the beginning of the grievance period (call your assessor’s office to find out when it comes out for your municipality). These days some municipalities are mailing notifications of tentative assessments to homeowners before the grievance process.

If you want to determine the Fair/Full Market Value yourself, you will need the assessed value of your property from your tax bill and the Residential Assessment Ratio (RAR) which you can obtain from your assessor’s office (make sure that you are given the RAR and not mistakenly given the Equalization Rate for commercial properties). You can also obtain the RAR from the New York State Office of Real Property Tax Services website.

Caution! Most tax bills use the Equalization Rate for commercial properties to perform this calculation and that typically results in a seemingly lower Fair/Full Market Value.  As an owner occupied residential property, you are entitled to use the Residential Assessment Ratio (RAR) which is typically favorable.

 If you don’t use the RAR you could be over assessed and not know it.  USE THE RAR!

Divide your assessed value by the RAR.  Since the RAR is expressed as a percentage, first convert it to a decimal by dividing by 100.  So, if the RAR is 2.50% it becomes .0250.  Then divide the assessed value by the RAR.

Assessed Value        RAR (converted into a decimal) = Fair/Full Market Value

   $10,000        /                   .0250                                     =          $400,000

You are most likely assessed correctly if you believe the figure you calculated to be the accurate market value of your home. If, however, you believe this number is too high, you could have  cause to grieve your assessment.

If you have any questions, Vergara Fox & Associates offers a free, no-obligation phone consultation at (914) 610-0951 to help you determine whether you are over assessed.

A new blog

In this blog Carol Vergara and Michael Fox look to share information about the real estate tax appeal process with homeowners and other real estate professionals. From Vergara Fox & Associates, LLC both Carol and Michael are experienced residential real estate tax representatives as well as residential appraisers. They serve the New York counties of Westchester, Rockland, and Putnam.