contesting a real estate bill
Ohioguy
tax bill. The city announced that they were essentially raising
EVERYBODY'S taxes by a large amount - about 25% - so I showed up and
made my case in person to an "independent auditor". I ended up getting
my taxes to stay the same as they had been, rather than increasing, so I
felt the time was worth it. All I really had to do was take a few
unflattering pictures of several issues I had never gotten around to
fixing up yet, plus show recent sales of a few houses that were both
closer to ours than the examples they had, and more recent.
Now we are moving, and I have until the end of March to contest the
current valuation of our new place. The situation this time around is
different. I have to use a form, sent through the mail. They also ask
for much more information. Plus, our "new" house (actually 30 years
old) was HUD owned, and purchased through the FHA 203k rehab program.
Previously, the house sold for $117k, but we placed the highest bid
at auction for $60k. The place was NOT in livable condition - HUD had a
whole list of things that needed done just to make the place fit for
habitation by humans.
Of course, I'd like to be paying taxes on a $60k house, since that is
what we paid for it up front. But on the form, they ask "if any
improvements were completed in last 3 years, show date and total cost".
That's a tough one. Due to HUD stipulations, repairs are currently
ongoing on the property, and must be done before we can move in. The
only thing that has been completed at this time is the roof - but that
was nearly half of the total repair costs.
I guess what it boils down to is whether doing something that HUD
requires to make the place habitable is an "improvement" or simply
maintenance of the property. For example, am I "improving" the property
when I make it so that the roof doesn't leak? Do they give me a tax
discount when the roof gets in poor enough shape that it is leaking?
Technically, I haven't paid a cent for any improvements yet, and
won't until all of them are completed. Both HUD and the general
contractor are willing to wait until all repairs are finished before
payment is due/required. As such, I'm wondering if I can simply say
that the repairs are not complete at the time of this paper's filing,
and as such leave that part blank.
I was thinking of just listing the HUD auction sales price for the
place, plus submitting several recent similar sales from the area.
One of the HUD required changes was mold remediation for the
basement. Previous owners used plain drywall down to the floor level,
and used absolutely no treated lumber - even for the base plate. There
was mold on the lumber and the drywall, and I could see water marks on
the drywall 3 feet up. As part of the solution, I'm getting a new sump
pump installed. I also tore out all of the drywall and lumber -
everything that "finished" the basement, and everything that the mold
could eat. Now the basement is back to the bare walls. I noticed the
tax bill says "finished basement" - so I guess I could use the argument
that it is now unfinished to balance out any "improvements" if I have to.
I was successful last time around in stopping an increase, but this
time around I'm actually trying for a decrease, so I'm not as optimistic
about my chances. Anyone have some suggestions, recommendations and/or
hints regarding this? Thanks so much!
Al
You're doing a good job so far. However, you are toast on the roof
issue. A new roof is a capital improvement. You add the cost to your
cost base on the home. The technicality of not having paid the bill
yet is still questionable. The improvement is there and quite visible
should an inspector drive by. If the roof has passed the zoning
inspection, then I think you have absolutely no alternative other than
listing it.
The basement? You unfinished it. Document that with your Fuji. I think
you are good to go there.
Ohioguy
I thought that might be the case. We wanted to move in sooner rather
than later, so we had them start the repairs pretty much immediately
after closing. As far as taxes go, I suppose it would have been better
to immediately contest the value, then wait a couple or 3 months before
repairs commenced.
Right now, I guess a big question is this: do I contest right now,
before all the repairs are done and paid for - but while the guys are
actually there doing work, and it's obvious - with a huge dumpster out
front? Or should I wait 2 weeks until the dumpster and everything is
gone, and nothing is being worked on, and THEN submit all of the
paperwork? Not sure if it makes a difference, but it might.
Al
I think it's best to go and get it done. The assessment is supposed to
be a snapshot in time so the less completed, the better. Having the
dumpster out front won't hurt the case. What you report is truthful.
Let them look all they want. You are only buying this year anyway
before all the work is completed and it's a new deal.
Malcom "Mal" Reynolds
<6vTcn.6029$YR1....@newsfe17.iad>,
Ohioguy <no...@none.net> wrote:
> Of course, I'd like to be paying taxes on a $60k house, since that is
> what we paid for it up front. But on the form, they ask "if any
> improvements were completed in last 3 years, show date and total cost".
Governments and beaurocracies live on
technicalities. If that is the exact
wording on the form, I'd check any and
all ordinances associated with the
form/process. If "completed" means
"completed" you might have a legal leg
to stand on.
Two caveats: I am not a lawyer and you
should ask one. If you play the not
completed card, it's likely that there
is some way they can pull permits it
your completion doesn't meet some
deadlines.
But I always take the law to apply
equally to those who make these stupid
laws.
Good luck.
Just a thought. Why not get ordained and
call your property a Church?
Bob F
Isn't the assessment based on the value on Jan 1?
Bob F
Also - where I am, major improvements can have taxes on them defered for 3
years, IIRC.
Brian Elfert
>I think it's best to go and get it done. The assessment is supposed to
>be a snapshot in time so the less completed, the better. Having the
>dumpster out front won't hurt the case. What you report is truthful.
>Let them look all they want. You are only buying this year anyway
It is unlikely the assessor will show up before the work is done in two
weeks.
The assessed value is generally supposed to be a best estimate of the
market value of a property. I would take the purchase agreement to the
county and say look I paid $60,000 so that is the current market value of
the property. I was able to get my assessed value reduced by $30,000 when
I bought my house 10 years as the purchase price was less than the
assessed value.
Now, some areas don't go by market value and do things like use the square
footage or count the number of bedrooms and bathrooms.