Since the Housing Bubble crashed Virginia as well as many other parts of the country have seen a rapid decline in Real Estate values. It would not be unusual to see a home that sold in 2007 for $300,000 to be re-sold today around $240,000.

Erroneous thinking among buyers, sellers and real estate agents is when Real Estate values are heading downward is that the homeowners tax bill must also be coming down too. This occurs because people assume that the fair market value and assessed value are the same.

In a perfect world this should be the case but assessed values are nothing more than a way to measure for a municipality to collect an appropriate amount of taxes to sufficiently cover the state and local appropriations chargeable to the city and town.

Few facts about your homes assessed value and the role of the towns assessor:

  1. A lot of states the assessed values are based around 90% of full market value, or maybe a few points above.
  2. Town Assessors are required to submit assessed values to the state Department of Revenue for certification every three years.
  3. The assessors review sales data and the Real Estate market every year and thereby reassess values each year.
  4. Assessors do not make of lower taxes.
  5. Assessors do not make the tax laws, which affect property owners.
  6. The Assessor’s Office has nothing to do with the total amount of taxes collected.
  7. The assessor’s primary responsibility is to find the full and fair market value of the property so that the taxpayer pays only their fair share of taxes. In January, there is no doubt that you will see the assessed value of many homes coming down. What you are also very likely to see is an increase in the fiscal tax rate to cover the difference in the lower assessed values.

As previously mentioned above, the numbers used are all just part of the game of collecting the proper amount of revenue to run the town.

The question is what are you supposed do if you think you are not being taxed properly in relation to other similar homes that have sold?

You should go to your local tax assessors office and file for an abatement. All the information necessary regarding the application process and the deadlines for filing should be available.

Applications for abatement’s are due on or before the due date for payment of the first actual bill. The assessor has up to three months in Massachusetts to act upon your abatement request.

What happens if you do not feel that the assessor made the proper ruling on your abatement request? If this occurs, you have the right to appeal to the you State Appellate Tax Board.

Here are a few exemptions which are available to those individuals that meet the various requirements in the following categories:

  • Elderly
  • Disabled Veteran
  • Blind
  • Widows and/or Widowers
  • Minor Children with a Deceased Parent
  • Minor Children of Deceased Police or Firefighters killed in the line of duty

Applications for tax exemptions can also be obtained from your local tax assessor’s office.

In most states senior citizens have also been able to claim a refundable credit on their income taxes for property taxes paid on residential property owned or rented. The reason for this is equal to the amount by which their property tax payments in the current tax year (excluding any exemptions and/or abatement’s), including water and debt sewer charges, exceed 10% of their total income for the same year.

As a Realtor, I see this written in the public remarks section of the Multiple Listing Service (MLS) like “What a bargain this home is priced X dollars below assessment.” Most of the time the Realtor is making a very poor reason to show why the house is priced like it is between the assessed and market value.

When I see something like this my immediate thought is that the home owner has been paying too much taxes on their home or the assessment has not been adjusted yet.

In just as many circumstances I have seen a home with a lower assessment and a buyers Realtor try to argue that the home is overpriced because of a low assessment.

The take home message is that if you are considering buying a home, you should not rely on assessed value as a good measuring stick of market value.There are plenty of homes that are over and under assessed. Hiring a good buyer’s agent that can point a homes true market value is always a wise move! REMEMBER TO REPLY ON WHAT HAS SOLD IN THE AREA THAT IS EQUAL TO THE KIND OF HOME, LOT SIZE AND CONDITION OF THE PROPERTY!

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