Real estate question: What is just value?

I bought my first home(a condo) in 2010 for $38,200. According to the appraisal by the local taxing authority, it’s now worth $32,000 in “just value”. But recently four apartments in my complex sold, for prices ranging from 45K to 60K. Why is the county’s appraisal so much lower?

I think just value is the same asfair value. I can’t explain the divergence, though.

I can’t speak for your regional area, and ours doesn’t use that same terms. But this may shed some light on the process.

Our towns perform a revaluation periodically to adjust values that have gotten out of line since the last one. After the reval, every property has an “Assessed Value,” which supposedly represents the actual value at the time, that is, what the property would sell for in a fair and arms-length transaction in an ideal market.

The first year, the Fair Market Value equals the Assessed Value.

The Assessed Value does not change from one eval to another unless the property is sold.

But the FMV changes yearly. Each year, the county treasurer gets a number from the state that represents the average change, + or -, of all properties in that town, village or city. This number is used to multiply each property’s previous year FMV, and that becomes the new FMV.

The number might be something like 1.03, which means that the average increase in property values is 3% for that year. A property with an Assessed Value of $100,000 would then have a FMV of $103,000.

When the Assessed Value and the FMV get too far apart for too long (it’s a complicated formula), the town is forced to revalue all properties within a certain number of years and we start the process over again. Revaluing the whole town is expensive, so they don’t do it unless absolutely necessary.

In your case, adaher, it’s possible that your condo complex’s value is rising faster than the average, but that’s just one possibility. I wouldn’t complain too much, since your tax rates are probably based on assessed value, and if they are too low, so are your taxes, so keep your mouth shut. :slight_smile: