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Hello all, probably a dumb question, but I can t seem to find the answer on the net?
Anyway, I know that Real Estate property taxes are based upon the appraised value of a home (done periodically), and not the sale price, and are sometimes out of date so a house that you pay 200K for may only have taxes based on a 150,000 most recent appraisal, and of course it can work in reverse in a declining market.
But, my question is, on a builders new build home, is the appraised value automatically the sale price? (Assuming they built and sold it at a reasonable price compared with nearby comps). If not, is it usually lower? Higher?
The assessed value of new construction in most areas, is usually the market value, the price you paid.
Those who can forgo or pay out of pocket for upgrades pay less for their home and thus the property is assessed at a lesser value than a home with all the bells and whistles included in the purchase price.
Thanks...I was just weighing the pros and cons of financing in upgrades vs waiting....that was a con I hadnt thought of......
Does it work the same way if the builder considers them "Incentives"? I E is the sales contract written up as if the price was 200K and then "discounted", but for tax purposes the 200K amount is still used?
It is best to check in the area you are looking at. In CA it is the purchase price. However in many states that we have lived it is a percentage of the purchase price (70% in some places). This can make a big difference.
It is best to check in the area you are looking at. In CA it is the purchase price. However in many states that we have lived it is a percentage of the purchase price (70% in some places). This can make a big difference.
Criss makes an excellent point. The purchase price is the start point for an assessed valuation. Some states use a percetage and some do not.
Thanks...I was just weighing the pros and cons of financing in upgrades vs waiting....that was a con I hadnt thought of......
Does it work the same way if the builder considers them "Incentives"? I E is the sales contract written up as if the price was 200K and then "discounted", but for tax purposes the 200K amount is still used?
I recently bought in IL, and we got $12K worth of free upgrades as an incentive. Our taxes are based on the sales price of our home, so the $12K free upgrade incentive is not counted.
Hello all, probably a dumb question, but I can t seem to find the answer on the net?
Anyway, I know that Real Estate property taxes are based upon the appraised value of a home (done periodically), and not the sale price, and are sometimes out of date so a house that you pay 200K for may only have taxes based on a 150,000 most recent appraisal, and of course it can work in reverse in a declining market.
But, my question is, on a builders new build home, is the appraised value automatically the sale price? (Assuming they built and sold it at a reasonable price compared with nearby comps). If not, is it usually lower? Higher?
Thanks in advance.
My new house was appraised at the assessor's own idea of a good value.
We provided the cost of materials and work to them, but what it cost us to build was a quarter of the assessor's appraised value.
It is best to check in the area you are looking at. In CA it is the purchase price. However in many states that we have lived it is a percentage of the purchase price (70% in some places). This can make a big difference.
I would only add that in California it is most "Generally" the purchase price.
I have bought several homes, 2 of which were advertised in "Homes and Lands", where the Alameda County Assessor said I did not pay enough and set my assessment higher than my purchase price.
I appealed both... on one I was able to get my assessment lowered to my purchase price... actually 2k below my purchase price!
I also got the other lowered but it is still more than I paid. The Assessor rational was the I paid under market because the Seller's needed to sell quickly???
Anyway, it is almost always based on the Sales Price when you buy an existing home.
It can get quite interesting when you are an Owner/Builder. The Assessor really could care less how much you have spent and instead relies on formulas based on square footage and amenities to determine the assessed value.
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