a “TRIM Notice,” the notice reflects what the property taxes are likely to be on the November property tax bill.
Why is my assessed value higher than the price I paid for the property? The just value of your property is determined as of January 1st of the tax year in question. While the Property Appraiser is statutorily required to consider the price paid for your property, he can disregard that factor if it is not relevant, i.e. if the sale occurred too long ago or it was not an arms-length transaction, for example. In most cases, the assessed value is influenced the most by sales of similar property in the area during the last calendar year.
As an example, if you paid $100,000 for your property in January 2005, but similar properties were selling for closer to $200,000 in the last few months of 2008, your 2o09 assessment will likely be higher than what you paid for the property.
If I re-finance my property or take out a line of credit, will my assessment increase? Probably not. The Property Appraisers generally base their determinations on actual consummated sale transactions between willing buyers and willing sellers.
Sales prices are going down, so why is my assessed value going up? Two issues are at play here. First, the Property Appraiser is required to assess all property at its value as of January 1st, and must submit his or her completed tax roll to the Department of Revenue by July 1st. Thus, the Property Appraisers tend to rely more on sales that occurred during the previous calendar year, and possibly sales from the first couple months of the current year. Thus, if sales begin to decline in the spring or summer, that decrease probably will not be recognized until the following tax year.
The other possible reason is the “re-capture” provision of the Save Our Homes Amendment. If you have had a homestead exemption on your property for many years, chances are your assessed value (on which taxes are determined) has been much lower than the fair market value of your property. This is because, by law, the assessment of homestead property cannot increase more than 3% per year (or the percent change in the CPI). However, if your assessment is lower than the fair market value of your property, the assessment will increase by that 3% each year until it matches the just value. So, even if the just value of your property decreased, as long as your assessed value was lower, that assessed value will continue increasing by 3% per year or the CPI, until it equals the just value.
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Tags: Budgets & Finance, Condo & HOA Accounting, Law & Legal