If you are a new homeowner or have never bothered to understand how your property tax rate is calculated, one thing that you will need to understand is what assessed value is. On this page, we will cover everything that you need to know on this topic.
Main Points
- Your home’s assessed value is what is used to calculate your annual property taxes.
- The people who prepare your assessed value often will leave you with unfair tax rates.
- It is easy to formally appeal and change your home’s assessed value.
1. Assessed Value is What Determines Your Property Tax Rate
When you file your taxes each year as a homeowner, property taxes will inevitably be something that you have to account for. Therefore, it is important to always keep tabs on what your latest assessed value is so that you can plan out your taxes and keep tabs on what you will owe. If not, you might get caught off guard with higher tax rates than you were expecting.
2. Assessed Value is Calculated Using Local Real Estate Data
When your assessed value is prepared, data such as your local area and your surrounding real estate market are taken into heavy consideration. If your neighbor’s home recently sold for $500,000, for example, and you have a similar design, then this information will be critical for the assessor who calculates your assessed value.
3. County Assessors Are Often Responsible for Assessments
One of the main issues that people can sometimes run into is the fact that the assessors who determine your home’s value actually work for the county. This can immediately create a conflict of interest if you think about it. Officials the same county you pay taxes to are the ones who determine your home’s value, and accordingly, how much you pay in taxes.
4. Assessed Value is Often Different than the Fair Market Value
When officials determine your properties assessed value using local real estate data, your home’s amenities, and eventually the assessed value ratio (between 10 to 100 percent of the fair market value), the price they come to is often much different than the market value that you could actually receive for the home if you were to actually sell it. This immediately means for anybody that this happens to that they will pay more than their fair share of taxes.
5. You Can Challenge Official Property Values
If you find that your home’s assessed value does not correspond with what you and your data say that the home is worth, then it might be worth the trouble to formally file tax grievances and challenge the assessed value in your county. Many people do this when they feel that they are being pinned with property tax rates that are simply unfair and unreasonable.
Typical Formula for Calculating Your Property Taxes
In order to calculate your property taxes, you will need to know your local area’s assessment ratio and the millage rate. Here is the equation you can use to estimate what your property taxes will be:
Assessed Value x Assessment Ratio x Millage Rate = Total Property Tax
Need Help Getting Tax Grievances in Nassau or Suffolk County?
If you are like many others in the Long Island area, you are paying property taxes that are much higher than what you should be paying. If you want to start paying your fair share of property taxes in the Long Island area, and not a dime more, then you are encouraged to give a call to Heller & Consultants Tax Grievance in Nassau County: (516) 342-4849 or in Suffolk County: (631) 302-1940.