Property Tax Bill: does this make sense? (houses, purchase)

[annesg]

We got our property tax bill and our house was assessed at $31k MORE than we paid for it 13 months ago. We probably couldn't get the price we paid for it today, so it's most likely worth a good $40k LESS than the assessment, maybe more.

Is this common in the area? Is this explainable somehow? I know NC's property tax procedures are quite different than other states I've lived in so I don't want to assume there's something screwy going on here......I know NC reassesses every 8 years or so (?) but the house is 1 year old...and should assessment exceed actual value, ever?

[MikeJaquish]

Reassessments are done every 8 years in Wake County. If you are in Wake County, your home was assessed in 2008.
Did you not get a notice of the new valuation?
Maybe the former owners got the notice, and tossed it.

[annesg]

There was no house in January 2008 (when houses were assessed, according to the Wake county site). IT was an empty lot. Construction didn't begin until April 2008 and we closed July 30, 2008. We paid $352k and we just got our tax bill for an assessed value of $383k. It makes no sense to me. How can they have assessed a house that didn't exist? (it wasn't an inventory home, either--we picked the house and added all the upgraded ourselves. the lot had been under contract at least 3 times over the prior year with other houses to go there).

[MikeJaquish]

Originally Posted by annesg

There was no house in January 2008 (when houses were assessed, according to the Wake county site). IT was an empty lot. Construction didn't begin until April 2008 and we closed July 30, 2008. We paid $352k and we just got our tax bill for an assessed value of $381k. It makes no sense to me. How can they have assessed a house that didn't exist? (it wasn't an inventory home, either--we picked the house and added all the upgraded ourselves. the lot had been under contract at least 3 times over the prior year with other houses to go there).

You need to speak with Wake County Revenue, and see if they will take an appeal.
If you have an appraisal to show them, that may help.

[crifever]

Originally Posted by annesg

We got our property tax bill and our house was assessed at $31k MORE than we paid for it 13 months ago. We probably couldn't get the price we paid for it today, so it's most likely worth a good $40k LESS than the assessment, maybe more.

Is this common in the area? Is this explainable somehow? I know NC's property tax procedures are quite different than other states I've lived in so I don't want to assume there's something screwy going on here......I know NC reassesses every 8 years or so (?) but the house is 1 year old...and should assessment exceed actual value, ever?

Yep its common in this year. Its our local government at work!....being creative with numbers. In theory at least we were told that the assessed value of a property might be higher than what its actually worth but they would reduce the tax rate to the annual property taxes that we pay would be somewhat even or maybe slightly higher. Just a numbers game.......

[underPSI]

Keep in mind the tax value has nothing to do with market value.

[CHTransplant]

Originally Posted by annesg

There was no house in January 2008 (when houses were assessed, according to the Wake county site). IT was an empty lot. Construction didn't begin until April 2008 and we closed July 30, 2008. We paid $352k and we just got our tax bill for an assessed value of $383k. It makes no sense to me. How can they have assessed a house that didn't exist?

In Orange County where I live, which reassesses property every 4 years, revised assessments came out in early 2009, and there was an opportunity to provide information to the assessment board and request an adjustment, followed by a formal appeal process. Final assessments were not fixed until late this past spring.

P.S. The fact that the house didn't exist as of January 2008 doesn't give you a free ride for the next 8 years. It just gets assessed when it's complete. I bought my (new) house a year and a half after the prior assessments, but a value still had to be attached to it for tax purposes. In my case, they valued it as if it had existed during the 2004 assessment period (such that the value was well below what we paid).

[PDXmom]

Originally Posted by CHTransplant

P.S. The fact that the house didn't exist as of January 2008 doesn't give you a free ride for the next 8 years. It just gets assessed when it's complete.

I didn't get the impression that the OP was going for this. I think the OP was just surprised to see in this market that the tax value was greater than what he/she paid for the home.

[TabbyCats]

Originally Posted by underPSI

Keep in mind the tax value has nothing to do with market value.

That's understandable for existing homes, but I don't get it when it comes to brand new construction. At least to me, it seems like there needs to be a "starting value", and that would be the initial construction purchase price.

[annesg]

Originally Posted by PDXmom

I didn't get the impression that the OP was going for this. I think the OP was just surprised to see in this market that the tax value was greater than what he/she paid for the home.

Exactly. I never assumed I'd get a "free ride," only that the price we actually paid for the house since it was brand new would form the basis for the tax assessment, not what the house theoretically might (or might not) have sold for in January 2008 when the last assessment went on.

We've owned 4 houses in our lives, in 3 states, and it's never the same, but never have I seen a price made up and assigned that has absolutely no relationship to what the house was valued at its construction. Last year's taxes (when we closed) were on the lot alone based on the 2008 assessment. That made sense to me. This does not.