How exactly does your city come up with your asset tax value? Are you concerned that your real estate taxes might be unfairly high and want to see if you are eligible for a reduction? That is what we discuss here.
First of all, no matter how confusing your asset tax statement is, with all of the assorted terms, ratios, millage rates, etc calculating your real estate taxes admittedly boils down to only a few factors: the store value of your property, your cities evaluation ratio and the tax rate.
The store value is what your asset would sell for on the open market, without any "undue influences," like being in a state of foreclosure, structural issues with the property, short sales time frame, etc. Again it's what your asset sells for under a general sale.
Property Tax Valuation
The evaluation ratio is very foremost to calculating your real estate taxes and is what is sometimes referred to as your "property tax value". What cities do is manifold your store value, by the evaluation ratio, the resulting estimate is the assessed value.
For example if your properties store value is 0,000 and your cities evaluation ratio is 80% your asset tax value would be: 0,000 x.80= 0,000 assesed value. evaluation ratios vary from state to state and from jurisdictions. Your evaluation rate could be totaling different than your neighboring town.
Tax Rate
The tax rate is also known as a millage rate and is the actual rate that asset owners pay in their given town. Like the evaluation ratio the tax rate varies from town to town and also from building types. For example a industrial building will be taxed at a different rate than a singular family home.
In addition, a singular family home used as a rental asset will regularly be taxed at a high rate than a singular family home that is occupied by the owner.
To form out your every year taxes you manifold the tax rate by the assessed value. For example take the assessed value of 0,000 x.020 (tax rate/millage rate) = ,000 in every year asset taxes.
Property Tax Valuation
On a real estate tax motion you can only moot the fair store value of your property. You cannot argue the tax rate or the evaluation ratio (unless they made a mistake and recorded your asset in the wrong category). But again, you can only argue the assessors understanding of your properties value. Keep in mind that most cities assessors are over worked and or under qualified, so they very often make outright mistakes. If you know of other similar properties in your area that sold for less than what they have recorded your asset at, than you most likely have a case and could save a lot of money.
Don't be like the 98% of asset owners that don't bother to motion their real estate taxes. They are leaving thousands of dollars on the table for no reason. The process to motion is admittedly not complex and won't eat that much of your time.
property Tax Valuation - How to think
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