Montgomery County property tax valuation reductions

[Anonymous]

I just got our property tax statement and saw that MoCo has reduced the valuation for our house by $100,000 below what we paid in January 2009. Don't get me wrong, I'm happy to pay less taxes, but I'm really confused. It seems like this just hurts everybody in the long run-- the county gets less tax revenue, the tax assessment number hurts us when we try to resell. Did this happen to anyone else?

[Anonymous]

Ours went down about 100K too, but then again that was down from a value we appealed and lost on in 2008. Of course, it's currently valued higher by the county than the two appraisals we got in Dec. 2010 and May 2011. Be grateful they are acknowledging the value has gone down, because for you, I'd hate to say it, it probably has. Tax assessments usually don't rise or drop as fast as your actual market value, so the tax evens out for the county in the end.

What I don't understand is not appraising a property at a value that someone is willing to pay for it.

[Anonymous]

OP again. I really don't think the value has dropped that dramatically. We bought in January 2009 when prices in the neighborhood had already dropped a LOT. Nearly identical houses on our street are still selling for about what we paid. I'm just not sure what sparked the dramatic reduction in the tax assessment.

[Anonymous]

The tax assessment doesn't hurt you when you resell. No one looks at the tax assessment - they look at comparables - when deciding what to bid.

[Anonymous]

Your new tax assessment is supposed to mimic the market value as of January 1, 2011. The assessment office uses a mass appraisal model, so its not perfect but they don't have time to do an individual assessment on each property. Additionally, they unofficially shoot for slightly under the real value so they limit tax appeals, which are very costly for the state.

Don't worry about the state's coffers. If the assessments are down on a county-wide basis, the tax rate will be increased to reflect the needed revenue.

[Anonymous]

So if our tax assessed value is more than what we paid for the house should we appeal that? I am new to this. We just bought for the first time this year.

[Anonymous]

to 12:28 - We just bought a house in July that we bought for about $40,000 less than the tax assesment. DH wants to contest it which you would think would be a slam dunk but I don't know anyone who has been through that process before. I just looked up the process for Montgomery County and Maryland, and there is a pretty straightforward form you fill out to appeal the assesment.

[Anonymous]

Anonymous wrote:The tax assessment doesn't hurt you when you resell. No one looks at the tax assessment - they look at comparables - when deciding what to bid.

It does, especially for savvy buyers who look at property tax records, Zillow, etc. Usually, you can price your home at about $100K over the tax price.

If the taxes dropped dramatically, you really can't price your home at a level at which you think it's worth. Furthermore, if your home is outstanding - as in remodeled or newly built in an older 'hood - you're screwed.

[Anonymous]

PP makes no sense.

It does, especially for savvy buyers who look at property tax records, Zillow, etc. Usually, you can price your home at about $100K over the tax price.

So if my tax assessment is $300K I can price my house at $400K? And if my tax assessment is $1.8M I can price my house at $1.9M?

As a PP correctly stated earlier, tax assessment is not really an accurate valuation of your home. At all. And Zillow? Please.

[TooOldToCare]

Anonymous wrote:PP makes no sense.

It does, especially for savvy buyers who look at property tax records, Zillow, etc. Usually, you can price your home at about $100K over the tax price.

So if my tax assessment is $300K I can price my house at $400K? And if my tax assessment is $1.8M I can price my house at $1.9M?

As a PP correctly stated earlier, tax assessment is not really an accurate valuation of your home. At all. And Zillow? Please.

totally makes sense

I've been looking for the past year. When we sold my TH, we priced it $100K above the tax assessment.

If you look at a 'hood - and examine the homes around it (go to Franklymls.com, for example) - they should be comparable, yes. But most homes will be priced about $100K above IF they're in decent shape. Schools are also a factor. Look at the homes in the "good" systems; you find them higher b/c of the tax base.

Do your research. I do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The tax assessment doesn't hurt you when you resell. No one looks at the tax assessment - they look at comparables - when deciding what to bid.

It does, especially for savvy buyers who look at property tax records, Zillow, etc. Usually, you can price your home at about $100K over the tax price.

If the taxes dropped dramatically, you really can't price your home at a level at which you think it's worth. Furthermore, if your home is outstanding - as in remodeled or newly built in an older 'hood - you're screwed.

Do you have any idea how demented this is?

[Anonymous]

Montgomery County bases its assessment on a combination of what it perceives as market value and what the county thinks your land is worth, which makes it arbitrary in the end. If it were solely linked to market value, it would be really easy for people to argue with the assessment, so they throw in this other factor that doesn't have a value outside of what the county determines it should be.

In 2008/2009 even though the real estate market was going down, MoCo's assessments kept going up. This resulted in a lot of complaints and in 2010 the assessments started to go down. Depending on your location, type of house, age, etc... they might have dipped dramatically and not so much for others who have property near a metro for example.

As for tying assessed value to market value, sometimes they are closer than other times and it depends on how much the county relies on market to determine assessments, and in this case MoCo relies on it only in part. And for some reason I don't under stand, your assessed value usually goes up right after you buy. The assessed value of our property before we bought was $30k below what we paid, then after we bought it went up by $50k more than what we paid (bought in 2007). Now it's assessed at just under what we paid.

For those that want to appeal, you certainly can and at this point in time you might win because the county has obviously changed it's calculations, but I don't know a lot of people that have won that battle.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The tax assessment doesn't hurt you when you resell. No one looks at the tax assessment - they look at comparables - when deciding what to bid.

It does, especially for savvy buyers who look at property tax records, Zillow, etc. Usually, you can price your home at about $100K over the tax price.

If the taxes dropped dramatically, you really can't price your home at a level at which you think it's worth. Furthermore, if your home is outstanding - as in remodeled or newly built in an older 'hood - you're screwed.

Just to be clear: savvy buyers look at comps, not tax records or zillow. And for reasons that should be obvious to anyone over the age of ten.
There is no fixed relationship between tax appraisal and the price at which you should price your house.

The house is worth what people will pay for it: this has nothing to do with tax appraisal. When prices are rising very rapidly, people will offer prices much higher than the tax assessment, if prices are collapsing they may offer much lower.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The tax assessment doesn't hurt you when you resell. No one looks at the tax assessment - they look at comparables - when deciding what to bid.

It does, especially for savvy buyers who look at property tax records, Zillow, etc. Usually, you can price your home at about $100K over the tax price.

If the taxes dropped dramatically, you really can't price your home at a level at which you think it's worth. Furthermore, if your home is outstanding - as in remodeled or newly built in an older 'hood - you're screwed.

Do you have any idea how demented this is?

demented? really?

"However, you home will sell easier if it priced near the assessed value[u]. This is assuming that your assessed value is an accurate reflection of the current market in your neighborhood."