If were over-charged 40% – 60% or more on your property tax, would you be OK with you? Experts have told us that in the United States, 40 -60 percent or even more homeowners ARE over-assessed!
Why such large over-assessment errors? An accurate market valuation home appraisal costs $300 to $450. Municipalities lack the funding to conduct expensive blanket reassessments for their territories. The time spent per assessment is minimal. Very often previous assessments are simply rolled over.
Every year the taxing authority releases a different figure for what they call their sales ratio. Different municipalities have different names for this sales ratio. It could be called the average ratio, assessment level, the common level of 100% true value. Also called: average percentage of full value, current ratio, the equalization rate (which may not always be equivalent to the sales ratio). Then also called: a director’s ratio, just valuation, the RAR (residential assessment ratio), and other names or names in the making.
100% sales ratio applies to the most currant blanket property assessment conducted by a community in the present year. Blanket assessment appraisers are an expensive overhead for a town. Most these large area assessments are conducted as many years apart as possible. For some communities that blanket assessment could be 12 years or more.
Most people when they see a low assessment think, “Wow, so I’m gaming the system when they town thinks my home is worth so little.” Little do they know the game!
Total Assessed Valuation divided by the sales ratio is what the municipality thinks your land and dwelling is worth. However, it might NOT be what it will sell for in the marketplace.
If the sales ratio were 50% and the house was assessed for $200,000, what is really being said is that that real estates’ market value it was being taxed for is $400,000. Most homeowners are not aware of this smoke and mirror math.
The chance for an over-assessment is high. If one doesn’t determine if they have a case for appeal they stand to lose thousands.
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