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I purchase my home at $128000 in 2006 but now, the Durham country collects the property tax of my home at $150,625 estimated value. It's kind of weird since the market price of all other houses in my neighborhood are currently estimated around $ 120000. My home is just a normal size one in this community and due to the currently financial woos, I have not been able to make any home improvements since I bought this house.
I am the first time homeowner so I am not familiar with this property tax thing though.
Why does the Durham County collect the property tax of my house way more than its actually market value?
Can anyone explain this issue? Is there anyway to correct this weird thing?
They do the revaluations on a schedule. Wake County does them every 8years and I think Durham does them every 8 also (though some do it every 4). The problem comes in that they did the last revaluations when the market was at or close to its high point, so many houses are worth less than tax value. Of course for years before that, many were selling for way more.
Since the tax rate is supposed to be set to be neutral when they change the valuation, it doesn't really hurt you unless your house is assessed incorrectly. That can be appealed if there truly is an issue against comparable houses.
I purchase my home at $128000 in 2006...
Durham county collects the property tax of my home at $150,625 estimated value.
Can anyone explain this issue? Is there anyway to correct this weird thing?
When was your property last appraised for taxes?
Quote:
Originally Posted by WSJournal
Forsyth County’s property revaluation notices are out, and the phones
at the tax assessor’s office are ringing off the hook. People are already filing appeals.
Only 7 percent of the county’s 157,000 tax parcels increased in value from 2009 to 2013. LINK
Quote:
Originally Posted by WSJournal
North Carolina’s counties, including Forsyth, could keep 2008 tax values in place
until a new property reappraisal in 2016 under a bill that... LINK
So what should you do it your newly built house, tax assessment is almost 30k higher than the purchase price? Any course of action that can be taken to reduce the taxed value?
In Wake county, if the valuation of every property is "too high", then the tax rate is lowered. If all the properties are "too low", then the tax rate is increased. That is what is meant by being tax neutral. The only way to change the assessed value of your house is to fill out a special form asking that your house be re-assessed, and the time limit for that ends some period of time after the official reassessment. So essentially if you were in Wake, you could not do anything until our next assessment in 2016.
Tax assessed value is based on specific factors like lot size, house size, probably road frontage. Yours may just have rated more highly in one of these factors.
So what should you do it your newly built house, tax assessment is almost 30k higher than the purchase price? Any course of action that can be taken to reduce the taxed value?
Confirm that the square footage is accurate. If it is high and you get it reduced, it may lower your tax bill.
Check your appraisal SF against the Tax rolls SF.
Your assessed value is the estimated sales value on January 1, 2008.
This topic comes up regularly on the forum. Often there is a basic misunderstanding of how the property tax system in North Carolina works. Real property is not taxed based on current market value. It is taxed based on market value as of the assessment date, at which time the relative value of all properties is established and a tax rate set.
The critical factor in this system is relative value - that is how your property compared to other properties at the time of assessment. While there may be some shifts between assessments, generally most property values move in the same general direction.
Since my home was not even a twinkle in the builder's eye in 2008, I find it a bit hard to believe that my assessed value is $60k over my home's selling price at the end of 2009. When did they do the valuation in 2008? Early in the year or end of year?
If it is as you say and they drop my assessed value to something more sane and believeable, they will just jack the tax rate up to compensate in 2016?
It is indeed unusual and that makes many of us onconfused. Our home didn't exist in January 2008. There was NO contract, no options added, no lot premium paid or not....it could have been any house the builders offered from 2200-2100sf, with whatever upgrades the buyers chose.
We contracted our house in March, added the optionsand negotiated to pay NO lot premium and to chop thousands off the asking price that the builder had posted for the house with no options, then we included $17k in options. All in all we paid about 40k less than what the builder advertised as the price for the same home without a lot premium.
The tax value that was placed on a house that didnt exist ... is what the sales office was asking for it--about $50k more than we paid months later and a good $40k more than it has EVER been worth.
In the past when we have bought homes, we paid taxes the first year depending on the exactl dollar amount we paid for the house. In following years we went up according to county wide increases (1%, etc. Taxes could even go down).
I'm not sure which I like better. I am secure in knowing that my taxes are set for 8 years, but on the other hand, it's been 5 and the house is worth a smidge less than we paid for it. I am sure 3 more years isn't going to give me another 50k in value, but I'll have paid that out in taxes all 5 years.
In 2016, if the house indeed shows the value it is now (40-50k below current taxes), will they lower it for 8 years?
I am secure in knowing that my taxes are set for 8 years
Not quite. Taxing jurisdictions can always change the tax rate. For example, Durham is right now proposing an increase in its property tax rate.
Quote:
Originally Posted by annesg
In 2016, if the house indeed shows the value it is now (40-50k below current taxes), will they lower it for 8 years?
Yes, they should reassess it at the then market value, as they will do for all properties. But, the taxing jurisdictions will do so in what they call a "revenue neutral" manner - meaning if property values go down, rates go up to yield the same amount of tax revenue. So your taxes may not change much - unless your value changed to a greater or lesser degree than other similar properties.
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