Property tax under assessed (sales, assessor, mortgage)

[jg1876]

I bought my house over a year ago, after it was completely rehabbed. In March I received a notice saying that the property had been reassessed. Somehow, they never got around to checking the paperwork - my home was listed as in poor condition, with incorrect square footage, details, and even stated that it was a non-primary residence. It would seem that despite my buying the house (after it had been assessed by my mortgage company at a significantly higher value), the city never got around to changing the details.

I called when I received the bill to notify them that the house was indeed a primary residence, and owner-occupied. They changed it, but still didn't change any of the details about the house, so the property tax is essentially on a house that is pre-rehab with no updates in about 100 years.

While I'm not complaining about the exceptionally low property tax, I am wondering what my options are with regard to my mortgage or surplus escrow. My mortgage company has offered to lower my payments until the city catches on, or to send me a partial refund from the escrow account, but is there any chance the city could demand a higher property tax after sending out a property tax bill? Also, if I do get some money back from the escrow account, are there any tax implications?

Both my mortgage company and I are stymied, and would appreciate any advice!

[kharing]

Wondering if you should just apply for the homestead credit since the city isn't listening to you and it's your primary residence. It is supposed to keep the assessment from increasing over 10% a year. Either way, it will get the department to review the assessment.

MD Homestead Tax Credit''

Here's a link to a discussion a few years ago:

//www.city-data.com/forum/balti...baltimore.html

[jg1876]

The funny thing is I actually did apply for the homestead tax credit last year. And they completely missed that too.

[North Beach Person]

Originally Posted by jg1876

The funny thing is I actually did apply for the homestead tax credit last year. And they completely missed that too.

The Homestead Credit doesn't kick in until your second year of ownership.

Go back on to the website Property Data Search and see what is listed for your property as far as owner occupied goes.

If it needs to be changed then do the Homestead change again. You will likely still have a one year wait, they don't do a "look back".

Another thing to consider, assessments are still dropping in much of the state (they're trying to put lipstick on that pig), not as much as a few years ago but still dropping.

[davecj]

The assessment doesn't affect anything other than your property tax bill. Unless you really want to pay more, just accept the gift and don't bring it up again.

[Mick_Feisty]

I would keep quiet and thank your good karma.

The city assesses every 3 years and they will likely find that the house is under-assessed when your neighborhood is next assessed (January I believe). It could be next year or it could be 3 years from now. Permits for work completed and sales prices are the 2 biggest factors for the city when assessing.

The homestead tax credit caps the increase at 4% in the city. Assessments can still increase by more than 4%, but you will see a credit (reduction) against what you owe on your bill for anything over 4%.

You MAY be VERY, VERY lucky. If your HTC kicks in (1 full assessment year in the house I believe) before you get assessed you should only ever see a 4% increase/ year in your taxes for as long as the house is your primary residence. And if the current assessment really is super low, your savings stand to be quite substantial.

I'm generally a very honest person, but I would keep quiet on this. Our taxes are much too high in the city (twice the next highest MD jurisdiction) -- ESPECIALLY for what we get.

Good luck and IMO congrats!

[james777]

Originally Posted by jg1876

I bought my house over a year ago, after it was completely rehabbed. In March I received a notice saying that the property had been reassessed. Somehow, they never got around to checking the paperwork - my home was listed as in poor condition, with incorrect square footage, details, and even stated that it was a non-primary residence. It would seem that despite my buying the house (after it had been assessed by my mortgage company at a significantly higher value), the city never got around to changing the details.

I called when I received the bill to notify them that the house was indeed a primary residence, and owner-occupied. They changed it, but still didn't change any of the details about the house, so the property tax is essentially on a house that is pre-rehab with no updates in about 100 years.

While I'm not complaining about the exceptionally low property tax, I am wondering what my options are with regard to my mortgage or surplus escrow. My mortgage company has offered to lower my payments until the city catches on, or to send me a partial refund from the escrow account, but is there any chance the city could demand a higher property tax after sending out a property tax bill? Also, if I do get some money back from the escrow account, are there any tax implications?

Both my mortgage company and I are stymied, and would appreciate any advice!

To answer some of your questions: As far as I know, the city cannot demand a higher property tax after sending out a property tax bill, but I wouldn't put anything past the city. There are no tax implications on money you get back from your mortgage escrow account. The best thing you can do is keep quiet, don't ask questions or even talk to city officials or state assessors, and thank the Lord for your gift.

[sobo16]

Originally Posted by davecj

The assessment doesn't affect anything other than your property tax bill. Unless you really want to pay more, just accept the gift and don't bring it up again.

This. You could call the assessment office every day for a year and demand a reassessment, and they still probably wouldn't do it. Seven years ago, I had to beg them to come out and do an assessment on my house, which they swore was a vacant lot worth $20,000. I would have let it go, but my title company was holding my funds in escrow until I got my first tax bill from the city, so I needed them to come do it. It took 8 months of me calling before they got around to it. One time they told me an assessor was going to come out but had to cancel because it was raining. You can't make this stuff up.

[jg1876]

Thank you all! I contacted my mortgage company and we're going to stay quiet and enjoy it for what we can!