By looking more strongly into the matter of the tax assessment process, you will be able to discern if your property taxes are correct. There is no other way. This also makes the tax assessors more accountable and the aggregate routine will become fairer for everyone. Homeowners are disputing their property tax assessment. After all, a property tax assessment is nothing more than an estimation of value that should be double checked by you.
Contrary to popular belief, tax assessors hardly ever make an assessment on a property. That job is bid out on a bid basis to professional area blanket appraiser businesses who find the sales value for the houses in a given area and come up with a valuation.
What happens is that the appraising organization has to earn a return on their per home bid charge and have to allocate a portion amount of their time per appraisal. They cover large areas and make their valuations rather quickly because of money and time restraints. Inaccuracies frequently occur. Consumer Reports, the National Taxpayers Organization and other respected authoritieshave reported the error rate between 40% to 60%
Unfortunately there exists a method that seems to compound the problem in that the market value of a house is divide by a sales ratio and that fraction and is given as the assessment. All understanding of property assessments depends on the sales ratio. Different states and jurisdictions call sales ratio by other names but meaning the same thing. This can be called, contingent on on the jurisdiction, assessment level, director’s ratio, the average ratio, the common level of 100% of true value, RAR (residential assessment ratio) or the equalization rate (which may not always be equivalent to the sales ratio).
THE FORMULA FOR MARKET VALUE (WHEN ASSESSED VALUE IS EMPLOYED): The market value of a property = the “assessed value” that the county tax assessor came up with DIVIDED by the sales ratio. That becomes smoke and mirrors to a lot of individuals.
Most get misled by this cost approach and don’t know what the valid score is.
Take for example, if the sales ratio for an area is pegged at 70%, a $500,000 dollar home should be assessed at $350,000. So, if the homeowner sees that their home is assessed at $420,000 he/she might be thinking they are getting a good deal, but in reality they are getting duped. Assessed value nomenclature muddies perception.
