Published on September 15th, 2022
We Recommend Using a Calculator, Math is Hard
Aventine Properties | 3 min read
Well it’s time to take a seat, grab your tax bill, a pen, paper, maybe a calculator, and any device that can open Google. First things first, find your assessment on your tax bill. It's usually labeled Assessed Value and it may have a dollar sign next to it. Why it has a dollar sign? The world may never know. The assessed value is NOT A DOLLAR AMOUNT. It is a unitless number sort of like a grade. It’s a number that helps determine the value of your home. For example, if you add a porch to your home, the town may add +50 to your assessed value or if you add an inground pool it might be +500. Things that add value to your home are added to your assessed value. This is the value that we try to lower when we grieve property taxes.
Now that you have the assessed value, time to find the tax rate. It might be labeled Rate or Rate per $1000. That number is the rate used for every property in the whole town. That number, unlike the assessed value which is unique to your property, is determined by your local government and the town budget. IT CANNOT BE CHANGED unless you attend town meetings and prevent your local government from doing any big projects. A few years back there was a public school that had requested $20-25 million dollars to build a state-of-the-art technology lab and it was shut down pretty quickly by the town residents. Had that been approved, the tax rate would have increased to accomodate the budget increase needed to fund that project.
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Now that you have the two numbers, assessed value and tax rate, try multiplying them and see what you get. Don’t forgot to turn the tax rate into a decimal! Did the result equal your taxes? Well, yeah that’s actually the formula! If it didn’t equal your taxes, it probably means you have some kind of exemptions on you tax bill. Which is great! Exemptions is basically free money that the government gives you to pay your taxes. Take advantage of them if you can. You can view all the NY tax exemptions here.
Now go on to Google and find your towns residential assessment ratio or if you’re in NY here's the website. The RAR is the number that adjusts your assessment to the fair market value. Once you find the RAR, divide your assessed value by the RAR and you get your implied fair market value. THAT is the dollar amount your town thinks your home is worth. THAT is the amount they think your home would be sold at if it was placed on the market today. So if that amount is higher than what you think your home is worth or what you recently bought it at, you should definitely grieve your taxes especially if you recently bought it! If that number is lower, then you are actually being underassessed. You can try to fight it, but it might be harder to prove that it’s an unfair assessment. Take a look at what homes around you are selling for. If they're all lower than what you are being taxed, we recommend you grieve your taxes as soon as possible!