All properties are revaluated periodically, typically every 4 years (but no more than 8 years)
That valuation should reflect the full market of the property at that time, there are appeal processes if the owner disagrees with the valuation.
There are a handful full of exemptions available, that can change this appraised value to a lower assessed value; the main one being for elderly citizens with low incomes, which halves the appraised value.
The other widely used exemption are properties used for agriculture, in which case they are taxed based on their use, not the market value of the land (in many cases this results in values less than 10% of market)
Local taxing authorities take their approved budgets and divide by their tax base (sum of all the assessments in their jurisdiction) thus the establishing the tax rate.
Yes, my appraisal went down after the housing crash of 2008, but the tax rates went up about the same percentage – so tax well about the same. Conversely when my appraised value has gone up, the rates have decreased – so again basically end up where I started.
Where I live (Pennsylvania), the county assessment office has licensed assessors who determine the value of the property. While the assessed value of the property determines the taxes on the property, the county assessment office has no direct ties to those taxes (the county doesn’t collect taxes, only the state and local townships collect taxes).
In our area, the assessed value tends to be lower than the actual market value. There doesn’t seem to be a set schedule for reassessment. I have lived in this home for about 25 years and it was only reassessed once, and that was after a housing boom drove prices up significantly in the area. I have two rental properties that have never been reassessed but I haven’t owned those for as long.
If you disagree with the assessment there is an appeal process, but unless the assessment on your home is dramatically over-valued, I suspect that an appeal is likely to backfire on you. Most homes in this area are assessed at well below their current market value, so having the home re-assessed is just likely to raise the assessment closer to the home’s actual market value.
Some states (like NH) don’t have an income tax, so education funding is nearly entirely through property taxes. That meant wildly variable property taxes depending on how much your town chose to spend on their schools and if they had a commercial base. Over time this was mitigated by court rulings that spread the cost out a bit.
The town I used to live in had a residential tax exemption that gives you a considerable discount if you live in your property. This is designed to penalize and/or discourage rental properties.
It’s going to vary by state. I needed electrical permits and a mechanical permit for a ductless mini-split. Why a mechanical permit? Because central air systems need their ducts inspected, even if they don’t have any. Luckily the mechanical inspector is closely connected and he’ll just drop off a sticker when he gets around to it.
Anyway, you can play the permit game and not get any. They’ll find out someday if there’s a municipal reassessment or when you sell, but you’re usually not subject to penalties once the improvements are discovered, but you will be required to get a permit and then inspected and if they don’t pass it could cost you big time. OTOH a friend recently needed his house appraised and inspected for refinancing. He wanted to list a 3rd bathroom down cellar* . The inspector asked him if he put that bathroom in and he answered ‘no’. So the inspector told him he’d leave it out of the report. My friend asked why and the inspector said since it’s not listed on the deed and my friend hadn’t added it then it he’d have to check with the city to see if it had a permit and he was pretty sure it didn’t since it was listed on the deed, and then he wouldn’t get the new mortgage until it had been permitted and inspected.
Absolutely - but the way the post I was replying to was written
(especially the part about not trusting a contractor who didn’t get a permit ) it seemed that the poster thought all improvements need a permit . Which might be true where they live but certainly isn’t true everywhere. And I doubt if anywhere requires a permit for strictly cosmetic improvements , like new appliances , tiles and cabinets for a kitchen that still looks like the '70s.
(Although I’m kind of wondering how I in particular could ever get caught for not having a permit for certain situations - my deed doesn’t have any description of the house, jus a description of the lot so you can’t tell from the deed whether I bought it with one bathroom or two. And since my house was built in 1913 , there is no certificate of occupancy)
Old houses have that advantage. When I first bought this house the town had the minimum record for it created when the town was incorporated in 1947. On moving in I immediately made a number of improvements without permits though nothing really major added, but replaced most of the electrical system and plumbing, and enclosed a porch and converted it to a bedroom adding about 250 sq. ft… The town reassessed properties in the early 2000s so they had to accept my description at that time. Since then I have obtained permits for anything that could be noticed. I doubled the size of the house with an addition and I’m pretty sure they would have noticed that so I ended up with a book full of permits for that. At least the town has put the permit process online now. But note the nonsense I mentioned about a mechanical inspection for the mini-split. That was a $140 permit. The installer came from MA where he does them with only an electrical permit required.
Originally I didn’t have a connection to the town sewers. The sewer line ran up my street and stopped 25 feet short of my property. Having it extended was estimated at a cost of $1000 a foot so I declined to do that right away. Some years later I looked out the front window to see an excavator digging up the street. A new house was being built across the street. I asked what was up and the guys working on it told me they were extending the sewer line up to the new house. So I called the town and asked them if I could get connected to the extended sewer line. The guy at Public Works answered with “What extended sewer line?”. I repeated my address and he said “There’s nobody extending that sewer line right now”. I informed him that I was looking at it happening and he said “I’m coming right up”. The end result was the town made them install a lateral for my house. They said the rule was that they had to do that for any property on the extended line, but it turned out to be just mine. They also turned out to be in a lot of trouble for not obtaining multiple permits from the town and the state, and not notifying Dig Safe. I heard that was the last job that contractor ever did.
I have. After the crash of '08, mortgage rates dropped and we took the opportunity to refinance. The refi process required an appraisal, which - because of market conditions - documented a big drop in the market value of our house.
Shortly after that, the city (Ann Arbor) assessed our property and similarly decided that its value had dropped - but their drop wasn’t as big as our appraisal showed. So we showed up at a committee that meets monthly to address homeowner issues like this, and we used our appraisal to argue that the assessed value (and therefore the taxable value) should be even lower than what they had lowered it to. They were quite happy that we showed up with a written, professional appraisal (not just a printout from Zillow) and ultimately agreed to lower their assessment to accord with that appraisal.
Ann Arbor has something similar, so even though property values recovered pretty quickly after the '08 crash, our property tax crept up relatively slowly.
I appealed the assessment of my current house. The whole town was reassessed so there weren’t many grounds to appeal on. In my case the dimensions they had were wrong, adding 100 sq. ft. to the house, They corrected the record and it reduced my taxes by $2. Since then I put on an addition and the whole town again reassessed this year. My taxes went up, but it’s 25 years later, the house has doubled in size, the value of the property has quadrupled, and I’m still paying way less than I was in New York even after my taxes there were reduced. I laugh when people complain about property taxes around here, they have no idea what it’s like to live in a money pit like Westchester county in NY. I was paying sewer taxes there and there was no sewer system.
I’m pretty sure we wouldn’t need a permit for new cabinets either, but it depends on the location. Our A/C required major changes to our ductwork and extending it to parts of the house which had no heat before. An inspector came to check. The contractor should know. For us new structures on the property need permits
And for us also the first thing they check is if you are up to code on CO alarms. We are and our contractors have been happy about it. I guess just a way of trying to get them into more houses. It doesn’t matter what you do, you better have CO monitors to pass.
Montana doesn’t have sales tax, which I am a fan of since it incentivizes buying locally. Lived previously in CO and the 8.9% sales tax really pushed us online. However, property taxes make up for it. We’re paying 4x as much on a property worth 2x.