Are your property taxes fair?
Given the dramatic changes in property values over the past few years, you may be wondering if your property tax rate is fair or accurate. In Arizona, property taxes are based on the Assessed Value, which, for owner-occupied residential property, is ten percent of the Full Cash Value. So, if the Full Cash Value of your home is $300,000, you will be charged property tax based on the Assessed Value of $30,000.
Your tax rate will vary depending on where you live. The rates are determined by cities, schools, water districts, community colleges, bond issues, etc. The tax rate applied to each property is the sum of the state, county, municipal, school, and special district rates. The average tax rate for homes in Arizona is about 1.3% of the Full Cash Value (or 13% of assessed value). So, if your home is assessed with a Full Cash Value of $300,000, and your property tax rate was exactly at the average 1.3%, then you'd be paying $3,900 per year in real estate tax on your home.
In the past, the Full Cash Value of most properties in Arizona has been lower than the actual market value. However, with the steep decline in property values that has taken place in the past three years, this may no longer be the case. In fact, the National Taxpayers Union estimates that 60 percent of homes are overassessed. It may be worth your time to do some checking to see if your property-tax assessment is realistic.
You can find the assessed value for a home in Maricopa County on the Maricopa County Assessor web site. Each year, the Assessor will send an updated assessment on the value of the home, upon which your property tax computation is based. You probably got this in the mail recently. The Assessor's Office utilizes a combination of information, including previous sales in the neighborhood, distance from major intersections or areas zoned differently, topography, view, livable square footage, lot size and components, etc.. The valuation is determined by a computer analysis of the information gathered.
Valuing properties is an inexact science to begin with, but when paper records were transferred to computers, many errors were made -- or retained. If there's a mechanical error, the tax assessor may offer a property tax reassessment. If you don’t catch any blatant
Once you’ve entered your address into the Maricopa County Assessor web site, scroll to the bottom and click on “characteristics.” This page will show some of the details of your home. Check each item for mistakes such as the square footage or the number of bathroom fixtures (a “fixture” is a sink, toilet shower). You may also want to look at the Full Cash Value of similar homes in your neighborhood. Look for properties similar to yours in terms of age, style and features. If the assessments on similar properties are significantly lower -- 10% or more – you may want to consider filing an appeal with the County Assessor.
To successfully appeal your property value, you'll need evidence. Property profiles and web-page printouts are helpful, and photos can be especially useful if you're comparing the condition of your home with others. You have 60 days after receiving your tax bill to appeal the property tax and present your evidence for an administrative review. For more information, including forms to help organize your appeal, get the AHA's Homeowner's Property Tax Reduction Kit. The kit is free with a trial membership on the AHA website.
Of course, if your home is worth considerably less in today’s market that what you currently owe on the property, you may have bigger problems than an overinflated tax bill. If you’d rather get rid of the house altogether, you should consider a short sale which would allow you to sell the home for less than the current balance(s) owed. For more information, please visit www.AZShortSaleTeam.com.