Home Buying in Stamford>Question Details

Maria Galleg…, Home Buyer in New York, NY

I am looking at houses in the $600's range however most of these houses have been appraised in the $250K

Asked by Maria Gallegos, New York, NY Tue Apr 15, 2008

range. When I buy a home like this will my property taxes go up?

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Dear Maria,

The short answer is, "Your taxes will virtually always go up." This fiscal year, July 1st through June 30th, the City of Stamford completed its 4-year re-assessment, shifting some of the property tax burden from residential to commercial properties. The assessment upon which the new July 1st tax bill is based was last October 1st's assessment, and the State requires each municipality to assess at 70% of that date's fair market value. The estimates of fair market value for assessment purposes, as of last October, were based upon public records of property transfers over the previous 18 months.

All this means is the numbers used by the tax assessor are already old by the October assessment date. Since the State requires the assessor to tax all properties "equitably", what is important is that the City's assessor use the same "yardstick" in comparing "values". If your property carries a $250,000 assessment, regardless of today's negotiated selling price, if should have been compared with other similar properties in the general $250,000 assessment range at the time it was evaluated.

Probably, the only concern you need to express to your Realtor® about the assessment vs. the price of the home you are targeting is if the tax assessment is higher than the price, not lower. You should hope and expect it to always be lower. If it is higher, that property might appear to be a slam dunk candidate for tax appeal, but you might not want to be the title holder when appeal time rolls around whereby you would have to be the one to file prove the reason for the appeal.

Try comparing the tax assessments of a number of $600,000 homes with the one you like. See how those properties compare, both in the land portion of the assessment, and in the "improvements". Improvements include the dwelling and any other structures such as a detached garage or pool. Your Realtor® can spreadsheet this for you, so you can see some of the variables that make up an assessment. Compare square footage of living space, lot size, basement vs. no basement, and you'll begin to see the difficulty an assessor's team can have in trying to assess equitably.

Stamford has 4 residential property tax districts, each based upon the City service received or not received. Your comparisons of actual tax bills should be made within the same tax district as the target property. Again, your Realtor® can help you sort this all out, but don't spend a lot of time worrying about this to the extent you miss out on your otherwise ideal home.

Typical annual property tax increases usually run between 2% and 4%, with the actual rates set in May each year, after the appeals are settled. Tax increases come regardless.

0 votes Thank Flag Link Fri Jul 25, 2008
Hi Maria.
Actually, your property taxes will remain the same until there is a reassessment, at which time everyone's will change (up or down). There are only a few states that revalue property besed on the most recent purchase price (there is a great deal of controversy in Florida now due to just this issue).
If the homes you are looking at are assessed at $250k (not appraised, which is different), and are selling at $600k, you can expect the assessment to increase at some time in the future, but usually not all at once. The assessment is what your taxes are based on.
Appraised value, which is what the lender is looking for, will be much closer to market value.
Hope this helps.
Agent for a New Age
Web Reference: http://www.LeaveItToLen.com
0 votes Thank Flag Link Tue Apr 15, 2008
Hi Maria,
I believe you are most likely speaking about the tax appraisal. The tax appraisal is usually based on 70-80% of the true market value. This is done to protect the home owner so if house prices go down, you will not be over paying in taxes. If you have any questions please feel free to contact me.
Caitlin Cragg
(203) 615-3609
0 votes Thank Flag Link Tue Apr 15, 2008
Potentially, yes they should. If you are buying a house for more than it is appraised for then I think you will also need to come up with some big cash to close. I lender doesn’t want to lend more money than what the house is worth. It was have to appreciate greatly before you could sell it. Are you working with a good agent? I am not in your area or I would help you.
0 votes Thank Flag Link Tue Apr 15, 2008
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