Monday, March 30, 2009

Its NOT The Assessment

Its Being Taxed At What Your House Was Assessed At Two Years Ago!

Every January, properties in Nassau County are, in effect, appraised for their Fair Market Value, this for the purpose of establishing an “assessed” value, upon with local property taxes are based.

And every January, and for the eleven months that follow, residents and politicians alike can be heard to loudly bellyache that we have high property taxes why? The Assessment, of course.

Yes, the dreaded Assessment.

But wait. Let’s take a closer look. In fact, pull out the letter you received in January from the Nassau County Department of Assessment. Chances are, the market value (presumably, what your house is worth in today’s market) is pretty much on the money. Perhaps it is even a bit lower than what similar houses in your neighborhood are selling for. So its not the Assessment, is it?

Technically, no.

The problem: The assessed value, as based on the market value of your house, has absolutely no impact on the property taxes you pay for the current tax year. Rather, the January, 2009 value, for assessment purposes, is for the 2010/2011 tax year.

So, simply put, the property taxes you pay today – to the county, the town, the special districts -- are not based on the value of your house as of January, 2009, but on the value of your house as it was in January, 2008. And if you grieved your 2008 assessment – a process that often takes up to a year, assuming you don’t have to go to court – your current taxes may well be based, for all intents and purposes, on the market/assessed values of your house as it was determined to be in January, 2007.

Given the real estate market, most houses in Nassau County were worth substantially more in January, 2007 and January, 2008 than they were in January, 2009. Ergo, higher assessed values on residential properties whose actual market values, in today’s dollars, are substantially lower than they appear on record. Higher assessed values means higher property taxes.

In terms that even us untrained, non-assessor types may understand, if the fair market value of your house in January, 2008 was $700,000, and in January, 2009 was $500,000, your 2009/10 property taxes – the taxes you are paying right now – are based on the $700,000 value, not $500,000.

Yes, we understand that when the market/assessed values go down, tax rates typically go up, this to make up the difference between what the taxing authorities (be they schools, towns, water districts, or anyone else with a hand in your pocket) need, and what the ever-eroding tax base can produce. The value of your house may go down, but you pay the same or higher taxes anyway.

And then there are the host of intricate formulae upon which the Assessor’s office relies, to compute this or confound that. [Damn you, Harvey Levinson! We hope you are enjoying yourself in Florida, where property taxes are much, much lower. ;-)]

Still, shouldn’t the property taxes we pay in Nassau County – among the highest in the nation – be based upon the actual market value of our houses as they are TODAY, and not as they were two or three years ago? [Surely, in an appreciating market, we’d be contrarians. Hey, give us a break. We’re trying to save you a buck or two.]

Taxation without representation is one thing. [Whether that representation is adequate is another blogpost for another time.] Taxing homeowners today – and going forward two tax years -- based on market/assessed values that bear little if any semblance to the current market is simply unconscionable.

We have the technology in place (okay, the technology exists, but maybe not in Nassau County) to adjust assessed values so that the current tax year appropriately corresponds to current market value. Nassau County homeowners shouldn’t have to wait until 2010/2011 to see the market values of their houses reflected in their property tax bills.

Why, all of this makes you want to go out and vote against the Assessor, doesn’t it? Wait a minute. We don’t get to do that anymore, do we?

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