Did you know that a lot of people pay more in property taxes than they should?
Are you one of them?
You could be if you don’t take a serious look at your property tax assessment when it comes in the mail over the next few weeks.
Let me explain.
I saw a story recently where a new homeowner was questioning his tax assessment. He lived in the Minneapolis area, but we can still learn from the process he went through. He bought his house for $452K and it appraised for $478K at the time of purchase. Then, less than a year later, he got the tax assessment in the mail and the appraiser valued the house at $525K—that’s a pretty sharp increase in less than a year!
Your property tax assessment is determined by your municipality. They’ll base the assessment on several factors, such as the sale price of your home, any improvements you’ve made, the property’s classification (like residential, commercial, agricultural, agricultural forest, productive forest, underdeveloped), where it’s located, and how it’s used.
When you have a mortgage, these taxes are usually escrowed. Then, each month, part of your mortgage payment goes into a special account managed by your lender. When your property taxes are due, your lender pays them on your behalf. So if your property taxes go up, so does your monthly payment.
Whether you pay your taxes directly or they’re handled through your mortgage, you need to make sure the assessment is accurate and reflects the true value of your property. Because the amount you pay in property taxes will reflect in your monthly mortgage payment. Taking a moment to review your assessment can save you from overpaying or missing something important.
For the homeowner I mentioned, the assessment didn’t feel right, so he decided to investigate further.
He contacted the appraiser and found out that the comparison set included a house that sold for $700K and another that sold for $250K. The reason for these wild differences in selling price could be anything. Maybe the $700K buyer was desperate to get the house and paid more than it was worth. Or the lowball price could have happened because someone sold their house to their kids way below market value.
Whatever the reasons, it appeared that the assessor was comparing his home to others that didn’t sell for their true market value. It was time to get help from a local real estate expert and potentially protest the assessment.
As your local real estate expert, I’m happy to help you navigate this process. The tax assessment process is different depending on exactly where you live, and in some cases, like for those in the city of Ashland, the firm that conducts the assessments is up to 250 miles away!
There’s no need for you to know all the details about how things work in all the different areas.
Just know that I do know those details and I’m here to help when you need me. By reviewing your assessment together, I can answer questions about how the value of your home was determined.
And if something looks off, I can give you guidance & the resources to request an adjustment.
If you’d like help reviewing your assessment, give me a call at (715) 292-6068 to schedule a time.
--Kevin Porter
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