Assessments and Property Taxes

Assessments & Property Taxes

It is that time of year again… tax season! You may have just received your updated tax bill that is payable #1 in full at the end of January, #2 in installments throughout the year, or #3 you may set aside / escrow your property tax payment each month that is paid as a part of your monthly mortgage. 

Each municipality varies in terms of how often they reassess property values for tax purposes. In many cases, the “market value” of your home is likely higher than the “assessed value”. The assessed value is determined by the municipal assessor or a licensed third party who completes the valuations. In many cases, assessors base their valuations on exterior appearance and upgrades/improvements they’re aware of, which helps them compute an accurate assessment value, and is used by the municipality to determine the annual property tax amount.

How does this process work? 

Traditionally, homeowners will receive a letter in the mail from the local assessor or agency conducting the assessments, asking the homeowner to call to set up an appointment to view the property; however, having the assessor inside of your home is not a requirement. Homeowners have the right to refuse entry, and only allow exterior viewing of their property. 

Why do some homeowners not want to allow interior entry? 

It’s likely they have made improvements to the property that are not yet reflected in the current assessment. Assessors do have access to local information from the municipality, including permit records that may indicate improvements to the property such as the addition of bedrooms, bathrooms, sunrooms, finished basements, etc. 

If your property has been improved in the last few years, when the reassessment letters come out, it’s likely the valuation will go up in relation to the improvements. That is how the municipality increases tax income to go toward municipal initiatives and improvements. 

What should you do if you think your reassessment is higher than it should be? 

On most of the letters, if you want to dispute the assessed value, you should contact the assessor or third party directly. They typically have a process for handling disputes, which in most cases includes the assessor coming out to your property, doing a full interior / exterior analysis and then conducting a re-evaluation based on their findings. In most cases, if you are going to dispute an assessment, they will need to have access to see your home. If you don’t want to allow them inside, that may not meet their re-evaluation requirements and they may not be able to make any adjustments.

On the flip side, if your property is in poor condition, perhaps a vacant property or rental that is not in the best shape. It may be in your best interest to have the assessor come out to visit and that may result in a lower tax bill when the next tax bill comes out.

Overall, taxes fluctuate, some years they go up and others they go down. It is very common to see that during the length of your homeownership, so if you are purchasing a home or have owned a home for some period of time, this shouldn’t come as too much of a surprise to you.

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