Wednesday, May 5, 2010

Adventures in Real Estate taxation

Don Wheeler

My wife and I own four properties in St. Joseph County:  Our home, two small rentals and a project.  In most areas paying property taxes is pretty straightforward but, as we know, that’s not so here.  The zaniness goes back many years, but it has now become a part-time job for me to endeavor to pay a tax which is based on reasonable data.

When we received our much-delayed bills last winter, I discovered that all our properties (with the exception of our residence) were magically worth over ten percent more than the year before.  These values are now supposed to be market based and since the market has not exactly been trending that direction I contacted a Realtor friend to help me access sales records of comparable properties. 

It was no surprise that this information showed that the assessed values were inflated versus the market.  So I filed three appeals in late December of 2009.  (In addition, there was a math error on the project’s tax calculation.)

In early April we received tax bills for 2009.  The new totals seemed to indicate that one rental and the project had been successfully appealed – but not the other rental.  Since I hadn’t heard anything about the appeals, I was a bit confused, so I contacted the St. Joseph County Assessor’s office on April 19 and was promised a call back.

Though I left several subsequent messages, the call never came. But I did receive written responses on two of the appeals on May 4.  On the value of the project house, the Board agreed with my proposal lowering the value from $35,100 to $30,000 (for 2008). But inexplicably, the assessed value on the bill for 2009 I received prior to that had been reduced to $16,100. 

By contrast, the Board only offered a modest reduction on the rental – from $72,300 to $67,000.  (Somehow they think a small, unimproved lot in an old neighborhood is worth $13,400, by the way.)  The highest priced comparable property sold for $33,000 in the given time period, so what weighty evidence did the Board use to refute the data I offered?  The form indicated “other”.  Who knows what they’ll say about the second rental.

It’s only when one sees what happens with multiple properties that one can devine how completely haphazard the system is.  That’s bad enough.  But the Board specifies pretty clearly what evidence they will consider when viewing an appeal:  it must be an appraisal or sales prices of comparable properties.

The appeal process should accomplish two things.  It should assure that the taxpayer is being charged a correct level of property tax and it should help the county properly value its housing stock. 

Neither purpose is served when the powers that be don’t play by their own rules.

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