Property Tax Question

[Jekyll]

House is on the corner of a county road and a small residential street. The residential street used to be dirt, but the people who lived on the street requested it be paved, and the township agreed, but tacked most of the cost onto the people's property taxes over a fifteen year period. My driveway is on the county road. Does it make sense for me to share the cost of paving the street that I never even use, simply because my property has frontage on it?

 

[CouttsClient]

If they requested the paving and got the tax bill let them pay it. I wouldn't share the cost.

 

[Douglas]

Originally Posted by CouttsClient

If they requested the paving and got the tax bill let them pay it. I wouldn't share the cost.

that's how i feel about the health care bill. hmm, and stimulus too. i could go on.

 

[Dakota rube]

These are not property taxes, but rather Special Assessments that are being levied against properties "benefitting" from the improvement. Since your property abuts the public street that was paved, you should've received a notice from the township outlining the plans for the improvement, and an estimate of the cost to be assessed against your property.

You would've also been notified of a public hearing to discuss the project, and given the opportunity to protest.

Special Assessments are a tax lien filed against your property and non-payment of them could result in losing your property through a tax-forfeiture taking.

 

[Jekyll]

Originally Posted by Dakota rube

These are not property taxes, but rather Special Assessments that are being levied against properties "benefitting" from the improvement. Since your property abuts the public street that was paved, you should've received a notice from the township outlining the plans for the improvement, and an estimate of the cost to be assessed against your property.

Yeah, the problem was that it happened before we bought the house. We pay property taxes twice a year in winter and summer, and the road assessment is only on the winter bill. Stupidly, we just looked at the previous tax bill which happened to be a summer bill, so we had no idea about this until we had been living here for a few months.

I just don't understand how we even benefit from the improvement.

 

[Dakota rube]

^Ah.
A couple things come to mind:

1. your sales contract might deal with undisclosed and unpaid special assessments. I'm surprised the title search conducted as part of the closing didn't reveal the balance owed. Were you represented in your purchase be either an attorney or a buyer's agent?; and
2. while you don't appreciate the benefit, a future owner might, and you would be justified in asking a higher price when it comes time to sell your property.

 

[Bhowie]

This is why SF is such a good source for info. It is like a 24/7 tech support chatroom about any random ******* subject.

 

[MrG]

Originally Posted by Dakota rube

^Ah.
A couple things come to mind:

1. your sales contract might deal with undisclosed and unpaid special assessments. I'm surprised the title search conducted as part of the closing didn't reveal the balance owed. Were you represented in your purchase be either an attorney or a buyer's agent?; and
2. while you don't appreciate the benefit, a future owner might, and you would be justified in asking a higher price when it comes time to sell your property.

Is there generally a disclosure requirement when it comes to special assessments? I know the laws will vary across jurisdictions, but in your experience is this the norm?

Point #2 is dead on, and it's a common philosophy when it comes to property taxes and special assessments. Even if you don't enjoy a direct benefit from usage of the road, your property value has almost certainly increased as a result of that road being paved. The government provided this service, and it probably only benefits the people immediately adjacent to the paving, so now those who've benefitted have to pitch in. It actually has a name (the benefit principle), and, in a lot of cases, it's actually an equitable method of distributing costs.

 

[forex]

Since we are on the subject, I have a question too. Is it realistic to expect that the county can revise the property taxes based on new property assessments? I bought a house in June of this year and the tax bill came couple of months ago and it was outrageous. It was based on previous property value, which was 50% higher than what I purchased it for. What options,if any,do I have?

 

[jefe]

^^ There is a dispute process in many places. Not sure how it's handled where you are, but here in Denver you have to provide a pretty comprehensive set of comparable values and other data for review by the county.

 

[MrG]

Originally Posted by forex

Since we are on the subject, I have a question too. Is it realistic to expect that the county can revise the property taxes based on new property assessments? I bought a house in June of this year and the tax bill came couple of months ago and it was outrageous. It was based on previous property value, which was 50% higher than what I purchased it for. What options,if any,do I have?

You can appeal it. Every government has an appeals process for property taxes, and your bill should have that information on it somewhere. You would basically go to the appeal and say "look, this is how much I paid for the house, and this is how much it appraised for when I bought it. Also, here are some comps that show a value similar to what I paid." Basically, you're trying to convince them that their FMV is wrong. If it's that high, there's a good chance your property was assessed during the boom (properties aren't reassessed every year), and they need to bring the assessment down to something that represents the current value of the home.

You're in Georgia, aren't you? If so, send me a PM, and I'll give you more state-specific input.

 

[Dakota rube]

Originally Posted by MrG

Is there generally a disclosure requirement when it comes to special assessments? I know the laws will vary across jurisdictions, but in your experience is this the norm?

My market deals with special assessments directly in the standard Purchase Agreement verbage, in several ways:

1. contract language specifies what the unpaid specials are; if the balance is different than what is stipulated, corrective measures are laid out in the contract. It also offers the buyer a chance to either re-negotiate the price and terms or the agreement, or to declare it null and void;

2. contract also deals with how the specials will be paid: in total by seller at time of closing? just this year's installment pro-rated between parties at closing, etc.

My market is very fucked up when it comes to special assessments, though. All public improvements in a new neighborhood are engineered and paid for by the municipality (rather than the developer) and the improvements are then paid off over 15-20 years. Unpaid special assessments in an average neighborhood here are now over $30,000!

 

[Dakota rube]

Originally Posted by MrG

You can appeal it. Every government has an appeals process for property taxes, and your bill should have that information on it somewhere. You would basically go to the appeal and say "look, this is how much I paid for the house, and this is how much it appraised for when I bought it. Also, here are some comps that show a value similar to what I paid." Basically, you're trying to convince them that their FMV is wrong. If it's that high, there's a good chance your property was assessed during the boom (properties aren't reassessed every year), and they need to bring the assessment down to something that represents the current value of the home.

You're in Georgia, aren't you? If so, send me a PM, and I'll give you more state-specific input.

Yes, MrG is correct in the appeal possibility. Just be prepared to not win. Taxing bodies, however, are saying, "Yeah, we know how much you paid. But you bought in a depressed market. Don't like your tax bill? That's okay. Don't pay it. We'll own your house in five years."

 

[pistolero]

Originally Posted by Dakota rube

Yes, MrG is correct in the appeal possibility. Just be prepared to not win. Taxing bodies, however, are saying, "Yeah, we know how much you paid. But you bought in a depressed market. Don't like your tax bill? That's okay. Don't pay it. We'll own your house in five years."

This, and you have to be mindful of protest/appeal deadlines. For example, here in Texas, if you don't file an appeal by May 31 you basically are out of luck until next year. Even if you didn't own the house at that time, once the protest deadline passes the only way they will change it is if you can prove they made a mistake somewhere.

Also check your closing statement and contract to make sure the tax proration was calculated using the correct tax amount. If the bill came in a lot higher than the amount that was used for pro-ration, you may be able to recapture some of the excess.

 

[forex]

Originally Posted by Dakota rube

Yes, MrG is correct in the appeal possibility. Just be prepared to not win. Taxing bodies, however, are saying, "Yeah, we know how much you paid. But you bought in a depressed market. Don't like your tax bill? That's okay. Don't pay it. We'll own your house in five years."

That's what I meant, I know there is an appeal process but there is so much resistance by the Tax commissions.