How would you like to pay taxes on twice the value of your property? I just finished a property tax appeal today for a Sacramento condominium owner. This condo was assessed at $166,000 by the Sacramento County Assessor’s Office, but the actual value was $84,500. Have a look below by comparing the blue dot ($166,000) with the rest of the black dots, which represent all sales in the neighborhood. Isn’t that wild? This condominium was assessed nearly two times actual market value, which amounts to about $1,000 too much in property taxes for the home owner to pay.
Condominium values have been hit hard in the past several years as the real estate bubble in Sacramento burst. Why? In addition to property values decreasing for condos just as value has declined for other types of property, crammed condo living and HOA fees have seemed less appealing for buyers who can now more readily afford a backyard of their own.
If you have any questions about property tax appeals, or would like to have my property tax consulting company look up your property for free, call 916.595.3735 or see www.SacramentoTaxAppeals.com.
What do you think of the property tax scenario above?
Wow! When the homeowner hires you, do they know that the difference will be that big? Or do they just have an idea that the assessed value is not correct?
Bryan, when a client engages my serivces, I do give them an idea before the final number (when I wrap things up) about what I am seeing in the market. In this case, I think the property owner was aware of values that were so low, but he was probably very glad to get to see how the graphs and data to add credibility to the notion of “property values have declined.”
Ryan,
Are you able to REO/Distressed sales for your tax appeals? Almost of the counties in MN don’t allow the use of distressed sales, even if that’s all there is.
Michael, I am not aware of any rule against the usage of REOs for tax appeals. The most representative comparable properties should be used. I won’t choose all REOs if I have a handfull of arms-length sales to choose from. There would probably be a value difference in that case. But if the market is saturated with REOs (like this condo market), that is really what properties are selling for. In this case, the REOs (and short sales) are driving the market. That’s a silly rule, if you ask me.
Why does Sacramento County Assessors office double tax on backyard sheds. Instead requesting the unit cost, they want the total cost of which I’ve already paid State tax. I was tax when I purchased the item I was taxed to get a permit and now the County assessors office wants to tax me again on my property taxes.This ridiculous. How many times do we have to get taxed??
So sorry Carol. The government always wants their share. At the least, if they are going on cost, I would pitch the idea that cost does not automatically equal value. If I have to be taxed on something, I only want to be taxed on the contributory value if that’s possible (rather than the full cost). For instance, a pool might cost $70,000 to build right now, but if buyers pay a much lower amount for the pool, the hope is to be taxed on what it contributes to value rather than the true cost. I’m not on their end of things, so I’m not sure if this would fly, but as a consumer I would at least float the idea of trying to get taxes down to a different level instead of cost. My two cents.