Can a lower purchase price reduce property taxes?

Question

The purchase price for the condo I'm buying is 25% less than the "assessed value" with the county. Will my assessed value for property taxes be reduced when the property transfers or can I appeal my assessed value based on my purchase price? The property taxes are relatively high right now, especially since the seller did not occupy the property.

Answer 1

Yes.  It should happen automatically when the assessor is informed that the property was sold.  That is based on the assumption that the last sale price was higher  than the one you are paying.  If it doesn't go down you may appeal the new taxes.  

Don't mix the purchase price and the assessed    value--they are usually only loosely related and may not correlate exactly.

Answer 2

I dont know what state you live in, but here in NY, property taxes are based, not on purchase price.., but actual square footage of useable living space...

Answer 3

You need to tell us what state/county you live in.  Lots of states do it differently.  In Pittsburgh, county taxes are done by a "base year.".  All taxes are based on the value of the property at the base year so that the homeowners don't have to worry about increases and always know what they owe each year.

Answer 4

Depends on the state.  Some have assessors that will assess the value every few years or so and base it off a percentage of that.  I live in MO and that is how they do it here.

When I lived in CA they went strictly of the SALE price.  

An assessed value is usually the term used for tax purposes and an appraised value is usually used for the sale.  

I would think since you are using the term assessed value than the sale price would mean nothing when it comes to taxation.  

You may be able to "appeal" the assessed value based on your purchase price.  Tax assessor are elected into office and should want to serve the public in order to be re-elected.  If you get enough people behind you things could change.

My county has just had a mandatory tax increase by the state of MO and many people are fighting it.  Will see what happens.

Answer 5

The property taxes have nothing to do with the occupancy; owner occ. vs. rental.

You can appeal, but it may be to no avail. You may have to wait until their next valuation. At that point, I would think that the reduced values may affect the assessments.

Remember, though, that the cost of the services remains the same or goes up so that they will likely increase the tax rate even if the assessments decline.

Call the treasurer/auditor and ask them what your options are but I think you are going to have to just suck it up and pay the taxes. Look at the silver lining; you got a great deal on the condo, right?

You will find out when you try to sell it.

Answer 6

Due to recent real estate de-valuations, hundreds of thousands of California property owners are paying hundreds or thousands of dollars in property taxes on values that no longer exist.



However, most property owners have no idea that there is any provision to reduce their property taxes due to the decreased value of their property.



Your local county assessor will not send you a notice that your property taxes are set at the pre-housing bust rates.  Each county assessor has no obligation to inform any property tax payer that they are over-paying their property taxes because real estate prices have fallen.  AS PROPERTY VALUES HAVE DROPPED, PROPERTY TAXES KEEP GOING UP.



To avoid the avalanche of homeowners complaining about these over-assessments, many county assessors issued statements that they will examine each property's assessment and reset the assessment to the correct current value.  This is obviously a complete falsehood.

Answer 7

It should lower the property taxes since you have established the actual value of the property and not someones opinion of what the property is worth.

Answer 8

Your chances of reduced property tax are close to zero.  Assume that your property is 'reassessed' at current market value.  THEN the taxing district would be required to re assess all OTHER properties in the district based on value to insure that all are treated fairly.

Please understand that property taxes are based upon the taxing district's need to fund the services provided.  The taxing district is NOT going to reduce its operating budget based upon falling values;  If the taxing district needs $2 million annually to operate, they will find a way to gain such revenue.