Tag Archive for Westchester property taxes

Attention! Property Taxes Demystified

Calculation of property taxes though often misunderstood are really quite simple.  There are only two components to calculation your taxes, these are the assessment and the tax rates.  Once you have a better understanding of your property taxes, what they represent, and how they are calculated I think you will be empowered to get them as low as possible.

The Assessment:

Your assessment represents a percentage of the overall value of your home this percentage can vary from .01 percent to 100% depending on your municipality.  This percentage is known as the Residential Assessment Ratio, or RAR.  If you want to see a list of RAR’s in New York State you can go to www.orps.state.ny.us/Munipro.

You can locate your assessment on your tax bill or by consulting with your local assessor, or the tax rolls located in the Tax Assessor’s office.  The tax roll is also typically available on line through your local town’s website.

The Tax Rates:

The tax rates represents the rate per thousand dollars of assessed value of your property. This rate is applied to your assessment to determine your property taxes.  The tax rates are a function of the budget.

Calculation of Property Taxes:

In order to calculate your taxes you simply multiply your assessment by your tax rates.  Just remember that the tax rate is represented as per thousand dollars of assessment.  So the easiest way to do the calculation is to divide the assessment by 1,000 and then simply multiply that figure against the tax rates.  You can see an example of this if you review any of your tax bills.  The tax bill will list your assessment, the tax rate, and the resulting property tax.  This is broken down line by line for each and every taxing district including Town, County, School & Special districts, so take a look for yourself.

In order to calculate your savings simply subtract your new assessment, after I have successfully reduced it for you, : ) from your old assessment and multiply that number by your tax rates.

When people see how much they save and how easy I make the process, they often feel bad that they did not take action earlier, but don’t, just take action and focus on your future savings.  If you need help, don’t hesitate to contact me.

What homeowners, especially new ones need to know about property taxes, but are never told!

A lot of homeowners tell me that they receive junk mail indicating that they are eligible for a 25% property tax reduction and they want to know if this is accurate.  The majority of the mail you receive regarding property tax reduction represents mass mailings, as opposed to targeted mailings, that go to every home in a given zip code.  Typically, the company has no idea if your assessment is too high.

This is nothing but a clever marketing gimmick.  The company or business that is sending you this mailer has no idea whether your assessment is high or low, let alone whether it is 25% too high.

Instead they are playing on the fact that once the case gets to the appeal stage you are eligible to a 25% maximum reduction.  What this means is if your case is filed and denied by the Board of Assessment Review (BAR) you have the chance to appeal and the maximum reduction you are eligible for is 25%, even if you are over-assessed by 50%.  This does not sound very fair does it?  Well, I can tell you from experience the system is not rigged in favor of the homeowner.

At any rate, the 25% is meaningless with respect to the advertisement, it is just an attempt to get the homeowner excited so that they will authorize the company to represent tham in hopes of getting a 25% reduction.

The reality is this advertisement is a mass mailing and the company has no idea if you are over-assessed or not.  Just in case you are not fully grasping my point let me give you an example.  Let’s say you have an assessment of $10,000.  The company knows that if they file your case and are denied they can achieve a maximum 25% reduction in the appeal phase.

So what they do is deduct 25% of $10,000, which is $2,500 and they tell you that you may be elibible for a reduction in your assessment from $10,000 to $7,500.  This may  get you excited, get your hopes up and get you to send in your authorization.  The reality is this company has no idea if you are over-assessed or not, they just want clients.

At the end of the day, it may turn out that your assessment is completely fair and your are entitled to no reduction or you may be entitled to a 5%, 15%, or 40% reduction.

Now the case that you might be entitled to a 40% reduction raises an important issue.  One that you need to understand and be aware of.  Let’s say that you are over-assessed by 40%.  Now, from the information I just shared with you, you know that you are entitled to a maximum reduction through the appeal process of 25%.  The question you need to ask yourself is what happens to the other 15%?  Is it possible that after the process is over you may still be over-assessed by 15% and be unable to file again for an entire year?  The answer is YES

This brings up a really good point supporting the importance of filing a case with good supporting documentation such as a certified appraisal, CMA, Comparable sales, sales contract, listing agreement, etc., & a letter of explanation regarding the specific case.  Inclusion of these items does not guarantee a reduction at this initial phase but it does give you a better chance.

In a case where you are over-assessed by more than 25% the hope is that you will get some reduction, even if it is only 10% or 15%, through the initial filing.  By doing this you are able to pursue the additional 25% through the appeal process and get your full 25% to  35% or more.

The problem for the homeowner is that many firms simply file the initial paperwork with no supporting documentation making an initial decision in your favor almost impossible.  Unfortunately many reps, not all, look at the initial filing as an entry form into the tax grievance procedure with the goal of getting the reduction through the appeal process.

In order to make the process more realistic here is a story of a family that I was able to get a 40% reduction for and save them $16,000, no joke.

Several years ago a contractor friend of mine told me that he had a client, Sue, who was interested in my services.  He said that he had been speaking to her about property taxes and happened to mention a story I had recently told him about a reduction I had achieved.  Upon hearing about this reduction Sue was interested and told my friend that her taxes seemed to be pretty high and that she would love to find out if there might be anything I could do to help her situation.

At this point my friend relayed the story and asked me to give his client a call, which I of course was more than happy to do.  After getting some information from Sue regarding her home and her Tax Assessment, I proceeded to review everything and determined that her assessment was much higher than it should have been.

Having determined that there was an opportunity for a reduction I obtained Sue’s authorization to represent her and proceeded to pursue a reduction on her behalf.  The result of the initial filing was a $9,557 reduction in her property taxes.  However, after reviewing the decision I determined that her assessment was still too high, so I proceeded to file an appeal on her behalf, which resulted in an additional $6,244 reduction.  I know it may be hard to believe, but this is a true story.  In this particular case I was able to obtain more than a $15,750 reduction in property taxes.

Great news right?  It sure was, but the only problem was that Sue had owned her house for 9 years and she had been overpaying the entire time!  If you do the math you can see that unfortunately, Sue effectively gave away over $141,000 over that 9 year period.

Now, I hope this clearly illustrates the importance of reviewing your assessment and pursuing a reduction as soon after the purchase of your home as possible.  Also, let me assure you that this type of gross over-assessment is not typical, but it does happen, so make sure it does not happen to you!

I feel strongly that is should be your choice how that money is spent!

These mailings focus on the fact that once in the appeal stage the homeowner is eligible for a maximum 25% reduction.  As a result they will tell you they can get you a 25% reduction off of your current assessment.

Technically this is true but it is also mis-leading.  If your house is only over-assessed by 10% you are not going to get a 25% reduction and it may turn out that you are fairly assessed and not elibible for any reduction at all.

This is the reason that I pre-scan all of my properties.  This allows me to determine if a property is eligible for a reduction and as a result I don’t waste anyone’s time including the homeowners, mine or the the local assessors and believe me the assessors appreciate this.  Many companies bombard the towns with frivolous cases that are eventually thrown out.  I represent only cases that have merit and I focus on getting those cases the maximum reduction possible.

As a New York State Licensed Salesperson and Certified Residential Real Estate Appraiser I am perfectly positioned to make these valuation determinations and represent your property.  If you have any questions don’t hesitate to contact me.