When homeowners in the Towns of Walworth and Ontario opened the notices about new property assessments, phones at town offices wentbonkers.
Upset homeowners flooded phones and social media bemoaning what they feared were increased taxes...but that may not be the case.
Assessments and market value
A property’s assessment is based on its market value. Market value is how much a property would sell for under normal conditions.
Assessments are determined by the assessor, a local official who estimates the value of all real property in a community.
All properties in your municipality (except in New York City and Nassau County) are required to be assessed at a uniform percentage of market value each year. In other words, all taxable properties in town must be assessed at market value or at the same percentage of market value.
For example, if the market value of your home is $200,000, and assessments in your community are at 30 percent of market value, your assessment should be $60,000.
Likewise, if assessments in your community are higher than market value, your assessment will see an increase.
Currently, the housing/property market has skyrocketed over the past several years throughout the area and houses especially are selling at record rates. It is not unusual for a home on the market to have multiple offers, often over well over the original asking price.
Supply and demand can cause an assessment to drastically increase over a period of time. The number of homes for sale versus the number of buyers determines how quickly the homes in your area sell. Currently, throughout the area, there is a shortage of home sales.
In communities assessing property at 100 percent of market value, your assessment should equal roughly the price for which you could sell your property. In communities assessing at a percentage of market value, the estimated market value of each property is listed on the assessment roll.
If your assessment or the estimated market value for your property is higher than the price for which you can sell your home, you should discuss it with your assessor.
If the assessor does not reduce your assessment, you can contest your assessment
Unfortunately, you probably won’t find an exact comparable sale. To account for this, you need to adjust the sale prices of the comparable properties. This will require some analysis on your part to determine whether these differences increased or decreased the sale price, and, if so, by how much. The adjusted sale price is your estimation of what the property would have sold for if all the characteristics were the same.
How does my home’s market value affect my property taxes?
Generally, property taxes are based on the estimated market value of your home. Your local assessor determines the estimated market values of all the properties in the community. Your assessor may use the sales comparison approach or any other method to arrive at your property’s estimated market value, which is available on the assessment roll and your property tax bill.
The assessor only estimates each property’s market value during a reassessment or when a property has a physical change. Some communities have not had a reassessment in several years or even decades. As a result, the estimated market value shown on the assessment roll or your property tax bill may not actually reflect your home’s current market value.
The Assessor is appointed by the Town Board to assess your property and is “Independent” of the Board. The Assessor receives instructions from New York State not the Town Board and is required to assess properties at fair market value, which is basically what it would sell for in today’s market. The only consideration is fair market value, not the percentage of increase. Percentage is not a valid argument in challenging your assessment, only comparable sales are used to defend fair market value.
Ontario Supervisor Frank Robusto wrote in his column this week (see page D7) “My personal residence went up almost 50%. Yes, I understand the shock when the new assessment notice is opened!
There is a process of challenging your assessment. Under the Law, the burden of proof is on you to prove the Assessor’s numbers need to be adjusted and you do this with comparable sales, appraisals, a market analysis, purchase offers, etc. Request an informal hearing with the Assessor. These meetings are being set via zoom, phone or in person. (the same in Walworth)
To understand how assessments relate to your tax bill, assume for a minute that the budget stays the same. If the assessments go up, the tax rate drops to raise the same amount for the budgeted amount. Currently the Town of Ontario total taxable value is $727 million. The current town tax rate is $3.19 per thousand, which raises about $2,319,130 (the tax levy). If the total assessed value of the Town was to drop, the tax rate would increase to raise the same budgeted amount. The Town Board and I are committed to keeping the budget under the yearly 2% tax cap.”