Property Tax Appeal

What Are The Reasons For An Incorrect Municipal Property Tax Valuation

A property tax assessment appeal is a legal remedy available to a property owner if the true market valuation of his property is at least 15% less than the municipality assessed property tax valuation. Further, if the property owner files the appeal in the state board of property tax appeals and wins the case, the municipal property tax valuation will have to be revised.

But why does it happen that the municipal property tax assessments are so high? Primarily, this is due to the associated property assessment values being high. So, the question arises why these in turn are so high?

There can be many reasons for this to happen. However, it is important to note that in most cases, the municipal valuations of the properties are lower than they should actually be. This is because municipalities do not frequently update their valuations to bring them in line with the true market valuations of the properties. They update their databases only once every few years. Therefore, the chances of the municipal property valuation becoming more than the true market value of the property are quite less.

However, let us come back now to the many reasons for high municipal property valuations. They include resource and time crunch and erroneous valuations made purely due to human error. They also include recently updated databases, and incorrect tax classifications applied in assessing the values of specific properties.

Let us now discuss below the many reasons for a high municipal property tax valuation in some detail.

Resource and time crunch and associated human errors: The municipal assessor is mostly hard-pressed in terms of both human resources and time to devote detailed attention to each property. Therefore, what normally happens is that the property valuation activity is mostly outsourced by the assessor to private agencies.

Such agencies temporarily employ students and trainees to do most of the required valuation work. This may sometimes result in erroneous evaluations mostly due to the huge load of work to be completed in a short period of time.

Recently updated databases: What may happen is that property owners may be surprised to suddenly receive a substantially high assessed property value in the Notice of Value postcard from the municipal assessor in a certain year. This is in contrast to much lower municipal assessed values of the properties pertaining to the earlier years. This may happen simply because of the updating of the databases in the previous year to bring the valuations much closer to the current true market values.

So, it may seem to the property owners that the municipal assessments are higher than warranted.

Incorrect tax classifications applied to assess the property values in certain cases: Sometimes, the municipal assessments of the property value may be based on an incorrect tax classification. Due to this, the property value may become inflated.

Inspite of the above reasons for an incorrect property tax valuation, it is important that property owners verify the basis of their appeals properly. Otherwise, it would become difficult to win the cases in the board of property tax appeals.