Home, Property, and Real Estate

First of all, every states property assessment process is very similar.  They all start off with the commonly accepted appraisal methods.  There is the cost, comparable, and income approaches.  As fair as residential they are mostly focused on the comparable approach.  This is where similar sold properties to the subject, are compared and differences are adjusted to the properties value.    

So the cities assessors department uses an appraisal method to determine the “fair market value” of your property.  I.e. what the property would sell for on the open market.  However, this is just an opinion of value.  All properties are unique, and all situations are unique.  This is the heart of the conflict with property tax appeals and where the tax payer must focus to prove to their city that they are over assessed and deserve a property tax reduction. 

Also, keep in mind that the assessor typically has thousand of properties to assess so it is common that they make mistakes.  It is also common that they will normally error to the cities benefit. 

Property Assessment – Assessment Ratio

Once the assessor, has determined their opinion of the fair market value of your property, he then multiples this value by the cities assessment ratio.  The assessment ratio varies from state to state and also varies from city to city.  It is also known as the sales ratio.  For example, in Birmingham, Michigan its 50%.

So if the market value of your property is $300,000 and your cities assessment ratio is 50% your assessed value would be $150,000.  Next the city applies the tax rate, or millage rate to the assessed value.  It may be in the form of a percentage or mills.   If your millage rate is 32 mills your annual real estate taxes would be:

$150,000 (assessed value) x .032 (millage rate) = $4,800 per year in real estate taxes. 

Per law we are not allowed to appeal the millage rate or the assessment ratio – only the assessed value…  If you decide to appeal your taxes this is where you will want to focus.  We strongly recommend that you learn more about putting together a good appeal presentation as your city will quickly shot down any appeals that are poorly presented and or have technical mistake  (Keep in mind that the cities want to protect their tax base).  

Video related to property assessment

In the last several years, we have seen real estate values drop significantly. However, assessed values, which are used to calculate how much is paid in property taxes, have not dropped at the same rate. If you live in Cobb County, Georgia, you have the right to challenge your assessed value and potentially lower your property taxes. If you have additional questions, please visit my website at www.samteasley.com

Frequently question about property assessment

What is the best way to challenge my property tax assessment?
Now that the market has declined, they have my house assessed at much more than it is worth, so they are charging me too much in local property tax. How do I challenge the assessment?

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More information on property tax reductions can be found here. property tax reduction or property tax appeal or real estate taxes