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I remember hearing from people that tried to appeal back in 2008 that Wake County's response was..."This assessment is good for 8 years and at sometime during those 8 years, we predict your home will be worth that amount".
That's non-sense. The assessment is the market value as of 1/1/2016. It is used for 8 years, but any predictions of future value are not valid.
Tax value is what the county believes market value is AT TIME OF ASSESSMENT. But, because the duration of that assessment lasts 8 years, and TRUE MARKET VALUE of homes typically fluctuate (maybe go up 4-5% on a typical year, but can increase by more or less OR go down, depending on the real estate market) there is no way humanly possible the tax value can EVER be exactly market value for more than a blink of an eye, unless it were updated in real time on a month to month basis.
Therefore not only is it incorrect to state that tax value and market value are the same thing, it is far more accurate to state that they are out of sync with each other the majority of the time.
In 2008 Wake county seemed to put a projections chart on a corkboard and throw darts at it, and used the numbers where the middle and high darts landed to assign the values. Unfortunately they did so at the top of a sellers market. Then the economy tanked, rendering pretty much all of their numbers ridiculous.
Market value is what a buyer is willing to pay for a home in the CURRENT market. Tax values never have any coorelation to the current market, except for the brief moment in time that they are assigned.
Tax value is what the county believes market value is AT TIME OF ASSESSMENT. But, because the duration of that assessment lasts 8 years, and TRUE MARKET VALUE of homes typically fluctuate (maybe go up 4-5% on a typical year, but can increase by more or less OR go down, depending on the real estate market) there is no way humanly possible the tax value can EVER be exactly market value for more than a blink of an eye, unless it were updated in real time on a month to month basis.
Therefore not only is it incorrect to state that tax value and market value are the same thing, it is far more accurate to state that they are out of sync with each other the majority of the time.
In 2008 Wake county seemed to put a projections chart on a corkboard and throw darts at it, and used the numbers where the middle and high darts landed to assign the values. Unfortunately they did so at the top of a sellers market. Then the economy tanked, rendering pretty much all of their numbers ridiculous.
Market value is what a buyer is willing to pay for a home in the CURRENT market. Tax values never have any coorelation to the current market, except for the brief moment in time that they are assigned.
It goes without saying that it is an estimate. I didn't mean to imply that they actually get market value correct. Of course it is what they believe market value to be, thank you captain obvious. Here is the context of my reply:
Quote:
Tax value has nothing to do with market value. Tax value is for the raw materials, land and what it takes to rebuild the structure. Market value is what anyone is willing to pay for the home, depending on supply on demand factors.
Tax value is market value, on day 1, not the value of the raw materials and land and what it takes to rebuild. I guess that would be insurance value.
It goes without saying that it is an estimate. I didn't mean to imply that they actually get market value correct. Of course it is what they believe market value to be, thank you captain obvious. Here is the context of my reply:
Tax value is market value, on day 1, not the value of the raw materials and land and what it takes to rebuild. I guess that would be insurance value.
After a brief visit into the imagination of a backpeddler, I guess what you originally wanted to say is that both tax value and insurance value are numbers that are assigned at some minute point in time, and quickly become invalid shortly thereafter, while market value is an omnipresent number that unlike the other two never becomes irrelevant or inaccurate, and is dictated by forces which are disconnected from either. I know that was obvious and all, but it would be better to say what you mean than to say something else and leave your audience to a mind reading experiment. But don't worry, I did the hard part for you and laid it out a bit more eloquently.
Out of curiosity and not to derail the thread, but why would our appraisal that was done in June 2015 have almost 300 more sq ft that what is listed on the Wake Co. site? I could see a small variance but 300 sq ft. is quite a bit.
Most commonly, this happens because the builder submitted plans to the county, but finished off an area that wasn't designated as finished in the plans or permit.
Or the prior homeowner finished off an area without a permit, so the square footage wasn't adjusted.
Bonus rooms over the garage, finished attic or basement are the two most common areas.
I tried to read the entire thread but was jet lagged so excuse my ignorance if someone asked this already.
We bought new construction from the builder in July 2015 and the tax value on that page still shows the land value of the empty lot that we bought. We paid tax on the sales price of the house.
Do we get a 2016 valuation or how does this work? What will our property tax be based on?
I tried to read the entire thread but was jet lagged so excuse my ignorance if someone asked this already.
We bought new construction from the builder in July 2015 and the tax value on that page still shows the land value of the empty lot that we bought. We paid tax on the sales price of the house.
Do we get a 2016 valuation or how does this work? What will our property tax be based on?
You'll most likely get a decent refund of escrow at the end of the year, then possibly have a lower mortgage payment next year (since the bank thinks taxes are less now) and then have a jump in mortgage paymets the next year or year after that.
That's exactly what happened to us when we bought new in 2013. Our mortgage payment was based off home purchase value, but the first year the county/town only accesses construction value, so they owed us over $2,000 back in escrow. The next year (2014) our escrow adjusted to the construction value again, even though it should have reflected the new assessment. At the end of 2014 I thought it was going to go up again, but they still kept it at the lower value until the end of this year. We just got a letter stating the new mortgage payment is up almost $600 a month, since I was paying lower escrow for two straight years.
To keep the payment more manageable, we decided to pay the bank a lump sum of about $3,600 which brings the mortgage payment closer to what we had in 2013. I'm not complaining since we had a lower monthly payment for two years and essentially were using the banks money for free. Unfortunately, all good things must come to an end . Our mortgage payment will most likely rise again in 2016, since our assessment is up 19%, even though the county values across the board have remained pretty flat. I wouldn't count on Wake County lowering the rate next year that much, if at all. Maybe Apex will drop it a few cents, since housing values in Apex increased, but only about 7% overall. Either way we'll be paying more in property taxes next year.
I don't feel too bad since they re-accessed values every single year in the county I lived in northern Va. There were some crazy fluctuations back in the housing boom era of the 2000's. My house value almost doubled from 2004 to 2006 and even though they would slash the rate, it was never revenue neutral, because they were giving county employees 8-10% raises since money was apparently growing on trees. That didn't last long after 2006 though.
Last edited by Waterboy526; 12-21-2015 at 08:20 AM..
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. Our mortgage payment will most likely rise again in 2016, since our assessment is up 19%, even though the county values across the board have remained pretty flat. I wouldn't count on Wake County lowering the rate next year that much, if at all. Maybe Apex will drop it a few cents, since housing values in Apex increased, but only about 7% overall. Either way we'll be paying more in property taxes next year.
