Have y’all got your property tax bill recently? Not sure if they’re staggered out to homeowners individually, or there’s some shotgun style they do them all in, but either way ours just came in and it almost gave me a heart attack! I mean, I know that our home value’s been going down or at least leveling off over time, but this number seems pretty drastic. And also gives me the impression that it’s not entirely accurate (in fact, I’m pretty certain it’s always way off, at least from talking to friends and family. Maybe you all know?)
Regardless though, my heart is only now slowing down after days of contemplating this ;) And it didn’t make it any better comparing it to the past 4+ years living here either. I thought I’d dig up the others and then compare them here to watch the
steady abrupt decline:
- Year 2007: $345,000 — Fair enough, we paid $360,000 for it and seemed to be worth at least $370,000 at the time (we should have bargained down a lot more than $10k… lesson learned #1)
- Year 2008: $346,000 — Up $1,000? Hmm… starting to feel dubious.
- Year 2009: $347,000 — UP AGAIN?? In the biggest real estate crash since I’ve been alive? Not buying it. Our realtor estimated that he’d list our house at $300,000 at that point if we wanted to sell. We didn’t go forward with it, but it just goes to show how off it is.
- Year 2010: $348,000 — AGAIN AGAIN?? Yeah, DEF not worth anywhere near that.
- Year 2011: $265,000 — *Commence heart attack* followed by *Relief that county is bonkers*
Based on these numbers alone (and my official poll on Twitter & Facebook, haha…) I’m going to say that no – these tax assessments are not very correct. In fact, they’re downright on crack. But I’d be happy to be proven wrong if you know any secrets I don’t?
Now on the plus side, this new valuation means we don’t have to pay as much tax!!! Woo!!! It’s a small bone for losing tens of thousands of dollars in your home (theoretically), but a bone to savor none the less. Instead of paying around $1700 or $1800 a year, it looks like this time around we’re sending in $1200 ( it’s automatically taken out via Chase who services our 1st mortgage and all, but still – $500 cheaper, baby!). Normally I’d feel bad for paying less taxes if I owe more, but I think we got in 3 years of overspending now that I see those numbers up there so bold in my face ;)
Unfortunately I’ve heard war stories of others paying a LOT more extra due to the way their homes were valued too. Not fun to correct, I’m sure. Obviously we didn’t think enough to go back and get anything lowered ourselves over the years, but if this one was $100k OVER, rather than below, you better believe I’d be causing a stink! And hopefully I’d even follow through too, as I’m sure you have to jump through hoops to get all that mess resolved. Bleh. Has anyone gone through it before? Fight to get their taxes adjusted?
We’ll see what happens next year, but for now we’ll sheepishly pay our bill and file it away with all the others… maybe I’ll get lucky and we’ll be back to renting again by then? :)
FYI: For those new people to the site, home ownership is not for me. I followed the “American Dream” cuz I didn’t know what I was doing and now I’ve awoken and realized it doesn’t fit my lifestyle – hence, me wanting to go back to renting. For those who it works for though, awesome!
UPDATE #1: I just called our county office and requested documentation backing up this year’s assessment! I’ll have it in the mail in 2-3 days, and literally took 2 and 1/2 mins to request :) Thanks for the tip, Tea!
UPDATE #2: I also re-read my tax bill, as well as looked online a bit more, and it seems our assessment is physically looked at every 3 years or so… at least from what I gathered off it (why is that stuff always confusing?). So that would make sense as to why it systematically went up year after year until this latest SLAM. Interesting stuff…
(Photo by Acutance)
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In my county, the assesor’s office will provide you with a copy of the file, with all the comps that the assesor used to value your property. Might be worth taking a look at it. Keep in mind it doesnt take more than a few foreclosures in your area to bring the value of your home down, but getting those homes off the market is the start to recovering value in your home. If you really want to know what your house is worth call a few real esatate agents and ask them what price you would have to price your house at to get it to sell within 30 days. The “liquid” value of your house, what you can get if you ahd to sell it today, will give you a good idea of what you can get if you have the luxury of more time.
We pay $1700 every 6 months!! For a 1350 sq foot house! And that is just the city tax. That doesn’t include the fire district tax and home owners insurance!!!
I think you can actually challenge the assessment of the previous 3 years or something like that. Would have to do some more digging.
I figure the lower they put it if I am not selling the better, however if I want to sell then paying a bit more taxes to raise the value perceived might not be a bad thing.
Our house is currently assessed at $100K (!!!!) MORE than it was when we purchased it just over 9 years ago. Every year we fight the assessment, and every year we lose the battle. It’s been happening to all the homeowners in our general area. My only consolation is that the assessed value is down $25K from it’s high in 2008. Ridiculous! I cringe every six months when I write a check for more than $4K for our prperty taxes. Guess this is what happens when you don’t have state income tax. They gotta squeeze the money out of us somehow.
That is a huge drop! That hints at the inaccuracy of the first few years. I would check to see if it can be modified. That seems absurd, but it must be a relief now (in some ways as you pointed out, of course).
(Sorry if this got posted twice!)
Property tax assessments are based on the Property Appraiser’s statutory appraisal of your property, *not* market value. That’s important to keep in mind.
Also, they usually go by the year previous to when you’re actually getting your bill, so the appraisals will always seem a little ‘off’ in a volatile market.
With such a strange progression of numbers, I bet your PA has had to change the way they appraise property, possibly because a lot of people appealed their assessments in the last few years to the Value Adjustment Board (or equivalent in your county).
Like you said, it’s lower – be happy :-)
My wife and I have started looking at houses… and here in Dallas the tax rate is 2.5-2.7%!!! Ouch! Really inflates our house budget. I echo the sentiment above about the importance of market value. rock on!
$1200/year for property taxes??? If it wasn’t for the fact that we both know your mortgage is way more than mine I’d totally be jealous! We pay nearly that every QUARTER in taxes. But I also live in NJ, land of the outrageous property taxes, so I guess $4200/year (which is what it was for 2011 and it’s about the same according to the preliminary 2012 tax bill) isn’t THAT bad.
Our house is currently assessed at $210,300, whereas we only paid $160,000 for it, but we got a notice from our township that they will be doing a reassessment to bring things in line with current market values for the 2012 tax year. So odds are our house will be reassessed to somewhere between $150-170k, which could save us as much as $1000/year. Pretty excited about that!!
Congratulations! If that’s what the country thinks the house is worth, then that’s what you pay taxes on. Don’t fight it.
In CA thanks to Prop 13 property taxes are locked in after your initial purchase and cant be raised (at least that how I understand it) which is pretty good in the rapid increase in values in the years since. Not sure how it works in the recent crash. We currently pay 1200 every 6 months. Last refinance I took this out of the banks responsibility (mistake) and we actually have to pay it ourselves, and I always forget about it till the bill comes due.
Thanks for the reminder
We pay about $1200 a year in property taxes. Which I don’t think is too bad given the size and location of our house (great school township). If it were go up much, I would probably change my tune a little.
Lots of stories have been written about how housing appraisals for taxes have been slow to fall – this is usually because the cycle to revalue all houses is usually 3 to 5 years depending on the jurisdiction. BUT you can always challenge the appraisal if you think it is overvalued. Again – in lots of places that has resulted in communities returning millions of dollars to taxpayers. You might check and see what the limit is on challenging past appraisals – you may get back some of last year’s taxes.
Once again, thanks for being so transparent with your money. Sorry to hear your house’s worth dropped so drastically in price this year. But I’m glad that you’ve found the silver lining to it.
That is a huge drop! I think it’s great that you are paying less tax. Don’t worry about the assessed value. The home is worth what the next buyer is willing to pay you right?
In our area, we have a 3% raise cap so the assessed value goes up pretty slowly. I would love a 100k drop in assessed value in our tax bill. We are paying about 4k/year with our home (? have to check).
It looks like they may only assess your property’s value every 5 years, and then assume a slight increase every year in between (which would make some sense if the economy wasn’t in the tank). Especially considering it was EXACTLY $1k increase every year and made no sense with recent market trends. I know my county doesn’t assess properties every year, so that may explain the strange trend in yours.
My property taxes increased drastically last year, although I was expecting it. Three years ago my house was in BAD shape and ended up as a foreclosure, so taxes were very low. The home was bought and flipped, and then I bought it, so I knew that when they re-assessed the value, it and the taxes would go up. Sure enough! My mortgage payments have been higher this year to catch up. I’m looking forward to the end of this year when it should go back down a bit since I’ll have paid back the increase to my escrow.
That’s crazy! So, are you going to use this new # in your Net Worth? That would really suck @ss if you did.
I wouldn’t let anyone know if mine had gone down that much. I’d be afraid they’d come back and reassess it for more. Count your blessings and the extra $500.
As long as you can hold on to what you have and the taxes are going down, hold tight, they’ve always bounced back. It just takes time after what we’ve been through. This predicament didn’t happen overnight and it’s not going away overnight.
Two updates here :)
1) I just requested the paperwork as to how the county calculated our houses’ value! Took me literally 2 and 1/2 mins on the phone, and will literally have it via mail in 2-3 days :) So now I can see what the heck THEY are seeing! Big thanks to commenter, Tea, for this nugget of advice. Fastest thing the county has ever done! Haha… (they’re probably used to poeple calling to fight it ;))
2) I researched a little bit more and pretty sure they re-assess our taxes every 3 years now. I couldn’t understand it totally (why is all that stuff always so confusing?) but it would make sense since 3-4 years ago things were doing a-okay right before the big BANG. And also makes sense why it went up so systematically like that. So maybe if I fight the last 2 years before this most recent ones, I could get a little back? Not sure if it’s worth the trouble, but for now I’ll await the paperwork I just requested ;)
@Tea – Thanks again! Def. true about hitting up a realtor for the more accurate “value” too — I’d feel bad wasting their time right now since I have no intentions of selling, but in the near future I will again w/ my own realtor since he knows I’ll be using him again anyways ;)
@Mysti – Wowwwww, I am so sorry! I didn’t even think to ask if our payments were average or not? I was mainly concerned by the extreme drop off… but boy, it sure does put things in perspective.
@philip – Yeah, so for now it’s good but def. smart to find out how to adjust if need be… just requested my paperwork per Tea’s advice above and I’ll have it within 2-3 days :)
@Julie F – WOW, are you serious? $4k eveyr 6 months??? That is insaneballs. I am in shock! (and sorry to hear!)
@20’s Finances – Haha, yeah. I mean, hard to turn down 500 saved dollars. Even if in the long run we’re getting screwed ;)
@Sarah Fowler – I bet you’re right. We have a lot of wealthy population in our county, and I’m sure thousands of them appeal it all the time… so I’m def. thankful for not having to go that route yet. Guess it only matters what the value is for real when it comes to selling. Harumph.
@Austin – Oh man, yeah it can get rough out there! Just please, whatever you do, promise yourselves that you’ll 100% seriously consider whether home ownership is truly for you or not. And if it is (which naturally is okay!) make sure you get something you can afford super comfortably ;) Like, as in on 1 income if possible. Haha… hardcore, I know, but I’m telling you — it’s the worst when you are forced to work or do something you don’t want to do cuz you’re now tied down to this humongo mortgage. It’s the biggest purchase of your life, so lots of time should be spent on it! (did I scare you yet? haha… as long as you weigh all the factors you’ll be okay ;))
@Stephanie – Haha, yeah — would totally trade with you if I could ;) I kinda like Jersey too, so I’m down!
@Kevin @ Thousandaire.com – No fight this time around, but I’m still super curious.
@Jeff @MyMultipleStreams – How interesting… didn’t know that about CA stuff? Pros and Cons depending on the phase the real estate market is I suppose. And sucky about having to pay taxes yourself now – man, I’d suck that too :( (well, maybe I’d be okay now since I have to pay quarterly taxes working for myself at this point, but still not something I’d enjoy taking on).
@Brian – I hear that.
@Suzanne – Yeah, you might have a good point there. Gotta consider if it’s worth trying to fight the past few years in that case… probably won’t cuz I have better use for my time, but it’s not ruled out all the way.
@Jenna, Adaptu Community Manager – Thanks Jenna :)
@retirebyforty – Ouch. Yeah, I should be more thankful our taxes are so much lower it seems from everyone else’s… guess I pay more in other areas I don’t know about ;)
@Jenna – Ahhhhh yeah, good thing you were expecting it! :)
@Jen @ Master the Art of Saving – No, I’m not gonna adjust my net worth cuz it’s not the real value of the house. But I will be contacting my realtor in the next few months for an update on what he would sell our house for now if he were to put it on the market. That’s probably the closest thing to an approx. value than anything else I would imagine… so at that point I’ll update it again :)
@Get Out Of Debt Girl – Yup! Agreed. Things will be better down the line for sure.
I just recently got our tax bill for a house we paid 104K for that was based on a 163K market value. Even though the tax bill was $1100.00, I will be appealing the assessment when Iam able to.
BTW we have generally cheap property taxes in Cheyenne.
$1200 in property taxes!?! That’s awesome… I live in the “low tax” state of Texas, where my modest 1350-sf house is appraised at a modest $163,000 and my property tax bill is over $3000/year….most of which goes to the school district (which I don’t plan on using–no kids and no plans for them).
Don’t worry about the property appraisal….unless you plan on selling, a lower appraisal means lower taxes, which is all good.
Hey J why dont u move to Chicago and see what a real heart attack feels like. My house is worth $296K and our taxes are $8K a year!!!! Talk about going broke over taxes UGH!
We did in fact challenge our tax bill. We went in front of the committee armed with comps and facts, tried to be friendly and smile a lot (not confrontational in the least), answered any questions that they had, and left. A few weeks later we had our new, considerably lower, tax bill. It didn’t take that long and was worth the time spent.
I wonder how you are paying about $1,200 for a $265K house when I pay $1,300 for a $115K house in the Louisville, KY area (though I live on the Indiana side). Seems like I’m getting duped!
@Jill Pruett – Ooooh I have yet to pay a visit to Cheyenne… heard it’s unbelievably beautiful up there!
@Christopher J – Dang, yeah – I didn’t realize how good we had it in property tax until reading all of these comments… thanks for sharing, my man!
@Lori – OUCH!!! Wow. I honestly can’t believe that. I wonder if people know how much that stuff costs BEFORE they buy their first house? Cuz if not, that is one scary ass wake-up call.
@Roanne – Oh cool! Good work :) I like that you touched on being friendly and smiling a lot – that is 100% the right way to go. If you stroll in all huffy puffy like it’s hard for others to want to help you. Way to rock it!
@Jennifer – Oh man, seems like tax rates are all over the place in this country, really. I had no idea until reading about all of your guys’ bills. Sorry to hear :(
I bought my home last year for $295,000, but the county had it assessed for $334,000. The tax bill was approx. $5,600 (and my city has the lowest tax base in the Cleveland area—because it’s a rich little town with lots of commercial properties that keep resident’s tax low). Anyway, I filled out the paperwork in December (you only have a 45 day window every year to appeal your taxes). My husband then had to go to the courthouse with the appraisal the bank did for our home loan, and the purchase contract showing what we paid. Lo and behold, our next bill showed that our taxes were lowered by @ $600 a year, or $50 a month. We were thrilled!
Only problem is, if everyone appeals and taxes keep going down, the school and city services will start to suffer. So, it is a double edged sword.
Oh man, yeah – awesome to save money but if quality goes down? jeesh… it’s interesting cuz we never usually think about the consequences, and only our own personal situations ya know? This is a good reminder that changes affect a lot of things :) Thanks for bringing it up!
One of the considerations for property taxes on our Cheyenne house is that Wyoming is a predominantly extraction state (mining/oil) and the bulk of the state (and county) revenue is derived from severance taxes. This results in lower property taxes. Don’t spread it around too much but Wyoming state government is in surplus. The local school district (Laramie Co #1) bitches and whines about no money but that is because they are a government not a business.
Here where I live (Overland Park, KS) when you buy a house that automatically becomes the assesed value. Lots of things can impact the assesed value though ranging from sales in your neighborhood, and even the mill levy. While not super common, if your mill levy went up, in theory the assessor could lower the value of your home, and still collect the same money due to a higher tax rate.. But that didnt happen with you since your tax bill went down.
Our taxes went up, as well. It seems absurd considering how values are low everywhere.
Still, our mortgage, taxes and insurance are still manageable for us which we are very grateful for. But these low mortgage rates may lead me to consider another refi.
@Jill Pruett – Wow, yeah – I had no idea! Very interesting stuff though – your secret is safe with me ;) And the other thousands of readers to this site, haha…
@Ronnie – Huh. So YOUR house assessed value is what you paid for it then, eh? Even if 10 years from now it’s worth way more or less? What if you never move out for hundreds of years? It’s still the same low rate? ;)
@Jerry – I know, those rates are super low! We didn’t get to snag them during our last refi, but hopefully the next time around (IF we’re still living here) we will.
Just as a follow on-we got our assessment on the house we paid $104,000 for. They appraised it at $115,500, and with the last millage rate (which they haven’t changed in about five years) our property taxes are estimated at $778/YEAR.
If this is correct, the combination of taxes and insurance will come to around $150/month.
If you are paying your own taxes for any reason, I STRONGLY recommend that you set up a separate savings account and arrange monthly transfers of your tax and insurances so that they are fully funded when they are due. The fact that that sum is coming out of my main checking account every month gives me a clear experience of the expense.
Totally agree with you! We have ours included with our mortgage payment, but if not we’d 100% set up a special fund for it – that’s no fun at all being surprised and/or having to scramble for a lump sum every 6 months or whatever – bleh.