B. City way over appraised my house, taxes way up (Baltimore: sales, real estate)

[Erik360]

I shivered when I got the notice. I owe an extra $1200 towards property taxes payable immeadiatetly. My settlement people said they have never seen taxes raised so high before. I bought my property for 275K, my settlement people appraised it at 290K, and the city appraised it at 320K. Huh?

My home is not nearly in the condition as any of the homes around me so why the disconnect?

Do I have any recourse?

[barante]

Sorry, I am confused. You describe an extraordinary scenario, which I don't understand. When did you buy your house? When did you get the tax bill?
As far as I know, the price that you paid establishes your new tax until the state-- and it is the state, not the city -- reassesses not only your property but all properties in that geographic area. This happens every three years.
Your notice should include an explanation about the appeals process. I would urge you to hire a professional to handle the appeall. I don't know anyone off-hand but can get you a name.
I don't understand the role of your settlement people in this at all. They are just technicians completing the sale, dealing simply with figures and reimbursements and are in no position to offer any valuations beyond your purchase price which is cast in stone. Since the settlement people often have no connection with the real estate agent, what they think your house is worth is total bull to make you feel that you got a steal. They simply don't know anything and don't care about anything beyond getting your money and divvying it up between the seller, agent, etc.
So what happened?

[Erik360]

My correction, the original appraisel was from my lender. I bought my home this June. Taxes paid for my house for 2006 was $3540. A month after buying my home I recieved a notice from baltimore city stating my escrow was short $600 for payment June-Dec and another $600 for payement for Jan-June 2008. Collectively, it stands my yearly taxes are now $4700. Quite a jump given there were no home improvements done to my house in years. Thank you for the reply.

[barante]

I'm not sure that I understand. Did you assume someone's mortgage?
Your only recourse is appeal, if the deadline has not passed.

[sobo16]

I thought there was a limit (10%) on how much property tax bills could increase each year in Baltimore City? The following website should provide some helpful links:

SDAT: Tax & Assessment Information

This link has information on how properties are assessed:

SDAT: Area Sales Analysis

And on this website, you can look up your property to obtain tax information, past bills, etc.:

Real Property

Good luck!

[barante]

Indeed there is a tax cap. But it does not apply to a property that changes hands. So if I buy a house from Ed, who paid $75,000 for it, I will not be able to enjoy his low tax rate. Instead, I will be taxed on the basis of the $275,000 that I agreed to pay for the property.
However, if you buy as the state is reassessing your area, it's possible that your taxable base might go even higher. That does not happen often, but it does happen. You can always appeal.

[Erik360]

I expected a rate increase as my home was due for re-assessment in 2007, but not a 35% increase from what the previous owners were paying last year.

The cape cods (like mine) in my neighborhood go for 310-325K. I bought my home for 275K because it was an obvious fixer upper. I don't like it but I'll own up and pay taxes like everyone else but the sharp increase doesn't seem justified. Unless maybe I build a whiffle ball stadium in my backyard...

I'm going to give the appeals process a shot. Anyone know a good tax lawyer (that's who I would use right?)

Thanks for the link to get me started.





Anyways, I'

[barante]

[quote=Erik360;1759671]I expected a rate increase as my home was due for re-assessment in 2007, but not a 35% increase from what the previous owners were paying last year.

What the previous owner paid or didn't pay is immaterial. Your taxes are not based on the previous owner's reassessment but on the price you paid x the city tax rate divided by 1,000.

[atlas1882]

Barante, where did you find that the tax base on a property immediately resets to the new purchase price in the event of a sale? I asked this question when we bought our condo at the beginning of the year and was told that we would continue to pay the previous tax until reassessment occurs next year. I wouldn't be surprised to learn that I was given incorrect information, yet when I've tried to search online for the proper treatment I've been unable to find anything specifically addressing this issue. In any event, we are currently still paying taxes at the previous owner's rate, so I was just wondering when and if I should expect to receive the letter in the mail informing us of back taxes due. Thanks.

[rudy_d]

Barante,
I think you're also incorrect that the tax is based on the purchase price. When I bought my house, I continued to pay the rate that the previous owner paid until it was reassessed a couple of years later. Fortunately the reassessment wasn't much higher than what I had paid. That's probably not true these days.