Tag Archive for westchester property tax grievance

Are my property taxes fair? What is the relation between my assessment and fair market value?

The assessment represents a percentage of the market value of all real estate, in a given municipality.

In Westchester County the majority of municipalities are assessed at a percentage of their true market value which typically results in confusion for the homeowner trying to determine if their assessment is fair or needs to be challenged.

In order to convert an assessment into a fair market value you must apply the Residential Assessment Ration to the assessment.  Essentialy you divide the assessment by the RAR and the result is the equalized or fair market value

Confusion often arises because there are several different ratios that may appear on the tax bill.

The rates you may see are the equalization rate, or the level of assessment.  However, neither of these rates are appropriate for calculating market value for the purposes of tax grievance for residential properties.  You must find the RAR which can be obtained through the assessor’s office or the Office of Real Property Services (ORPS).

The assessment represents a percentage of the market value of a given property.  Depending on the county and the town it is located in.  Properties can be assessed at any percentage of their market value.  Typically from 1% to 100% of market value.

In Westchester county the majority of properties are assessed at a percentage of their market value which often results in a good deal of confusion for the homeowner.  In order to see the percentage of value that a particular municipality is assessed at go to www.orps.state.ny.us/munipro/.

In my experience many homeowners have no idea what their assessment is or how it is relevant to their taxes.  Much of this confusion results from homes being assessed at a percentage of their market value. You see if homes were assessed at full market value it would be relatively easy to understand your assessment and whether it was fair or not.  For example, if all homes in your neighborhood were selling for $500,000 and yours was assessed at $650,000 it would be pretty clear that your house was over-assessed.

However, lets say you live in Philipstown where homes are assessed at 49% of their value.  Let’s assume you live in a neighborhood where homes are selling for $400,000 and you want to see if your assessment and taxes are fair. You look at your tax bill and you see that your assessment is $318,000.  Now if the homeowner knows that the property is assessed at 49% of its market value they would convert the assessment into a market value by dividing it by 49%.  Let’s do the math and see whether the house is fairly assessed.  $318,000(assessment)/49%=$648,979.

Wow, the house that the uninformed homeowner thought was under-assessed is really over-assessed by approximately $248,000.  I know this is scary and probably hard to swallow but it happens every day, so don’t let it happen to you.

In this particular case the homeowner is over-assessed by approximately 39%.  On a $10,000 tax bill that equates to $3,900 in additional, unnecessary taxes that the homeowner is paying each and every year and it happens every day.  Is it happening to you?

Okay, so now you know better.  You know that in order to see what market value your town is taxing you on you have to convert your assessment into a market value.  So how do you know what percentage of value your town is taxing you on?

Well, here is where it really gets interesting.  Before we go any further do you know what percentage of value you are being taxed at?  Did I just hear you say NO?

Alright. No problem, you can handle this.  Where can you find this information?  Think hard, how about your tax bill?  Go ahead and check your bill and it will likely indicate a market value for your property and the percentage that was used to calculate it.

That was helpful right?  Wrong!!  Whatever you do don’t count on this information to make your conclusion.  You see the rate that is used on your tax bill is often the equalization rate which is used to calculate the value of commercial property.  This rate is typically higher than the rate you would use for residential properties.  The result of using this higher rate is the illusion that your house is being assessed at a lower market value.

I can’t tell you how many homeowners have told me that their house is fairly assessed based on the information listed on their tax bill.  Let’s put some real numbers in play so this makes some sense.

Here is the situation, you live in Yonkers and your home is located in a neighborhood of similar homes that sell for approximately $300,000.

You take a look at your tax bill and you see your assessment is $10,000 and the market value is $298,500 and you also see that your property is assessed at 3.35% of its market value.  Based on this information it looks like your assessment is fair right?  Wrong again!!

The 3.35% represents the equalization rate which is used for commercial properties.  Your property is a residential property and you should be calculating your market value based on the RAR, which is conveniently omitted from your bill, in many cases.

But don’t worry, I am going to tell you what it is.  The RAR for Yonkers is 2.70% for 2013.  So now that we have the correct rate let’s check your $10,000 assessment and determine if you are fairly assessed.  Remember similar homes in your neighborhood are selling for $300,000.

Here is the math we will use to check your assessment $10,000(assessment)/2.70%(RAR)= $370,000 (Taxable Fair Market Value)

Wow, that’s some difference, you just went from being fairly assessed to being over-assessed by $70,000, or a whopping 19%.  If your tax bill was $6,500 per year you would be over paying by $1,235 each year without knowing it.

Can you really afford to not review your assessment?


How much have your property tax rates increased since 2002?

Do you think this is an interesting question?… Do you have any idea what the answer is? Personally, I find this to be a very interesting question and I find the answer to be absolutely sobering.

Just in case you did not know property taxes are calculated by applying the property tax rates to your assessment.  In most towns in Westchester County the assessments are represented as a percentage of the property’s market value.  The point is that the assessments do not change from year to year, unless they go down through a grievance or up through an improvement.

In order to illustrate tax rate changes since 2002 I am going to use as an example a hypothetical property located in the town of Cortlandt, which utilizes the Lakeland School System.  I am also going to assume that this house had an assessment of $10,000 in 2002.  I am also going to assume that the assessment is still fair in 2013 and is still $10,000. This is completely possible and will allow us to focus on the increase of property tax rates since 2002.

All of the figures I am using for this example have been taken from the Westchester County website www3.westchestergov.com/property-tax-rates.  I invite you to take a look at this site and figure out how much rates have increased in your town, when we are finished here.

If you lived in Cortlandt and utilized the Lakeland School system in 2002 your overall tax rate would have been $894.76/thousand dollars of assessed value.  This reflects the 3 major Property tax rates, namely, Town, County, and School.

If you lived in Cortlandt and utilized the Lakeland School system in 2013 your overall tax rate would have been $1,642.06/thousand dollars of assessed value.  This reflects the 3 major Property tax rates, namely, Town, County, and School.

If you do the math you will see that the tax rate, for this particular town with this particular school district, increased by 83% over that 11 year period.  Now, I don’t mean to pick on this particular town.  Please be my guest and go to the Westchester County website I referenced earlier and take a look at the change in your own Town and School district.  I am confident you will be shocked!

What this means is that assuming the assessment has stayed the same, which is a fair assumption, if it was fair and no improvements were made.  What this means is that your taxes would have increased by 83% during that 11 year period, and that is truly sobering. What would you do if your property taxes go up 83% in the next 11 years?  Is it possible?  If you have any questions regarding whether you are eligible for a property tax reduction please feel free to contact me directly.