The tax appraisal on my house is about 20K less than it cost to build and the bank appraisal was about 80K more so how much is it worth ? I don't have any experience selling but I figured the real value is how much I get when I sell. (which I have no plans to do anytime soon)I think the appraisers pull these numbers out of their butt anyway. My house is a 1.5 story and they valued it for more than a larger 1.5 story on the same street built one year earlier.

Regardless of what people say something is "worth", what it comes down to is simple IMO:

"It's worth what someone is willing to pay".

End of story. Property market here (Australia) is still at a high. We are still in quite a good position at the moment - fortunately the US sub prime hasn't affected us too much although inflation is starting to get a little out of hand.

Absolutely, I agree completely.

My complaint is that there is so little correlation between cost and "worth". You could not build my house today for less than three times what I sold it for.

Market forces today (and, in my opinion for quite some time into the future) are dictating an unfair disparity between cost and worth.

tanstaafl.

I'm sure the tax man will disagree and still tax me on $10k more than what it sold for. I have to pay $2k in property taxes at closing.

Here in Wake County, NC, you can appeal your tax valuation. I don't know that that is common, but I wouldn't be surprised. It's probably too late for you to do that now, though.

For years, I've used a service that protests my property taxes for me. Every year, the city would jack up my property valuation, they'd protest it back to where it used to be, and I'd pay them half of the delta. (They only charge you half of your savings in the first year. Everything after that is gravy. In real dollars, they typically managed to reduce my tax bill by $300 every year from the initial appraisal, and I'd pay them $150 every year in commission.)

What I like about this is that their incentives are aligned with mine. The more money they save me, the more I pay them. Conversely, if they don't think it's financially worthwhile to protest my property taxes, then they won't bother, and I pay them nothing. (It's not that I couldn't do it myself, but it's awfully nice to let somebody else deal with the problem.)

This post is worthless without links.

I did that the first year on my house because they didn't even have the right type of house so I complained and they dropped the value by 100K dollars.

I think they use a warehouse full of monkeys to asses properties around here. My parents' house, which they just got a buyer for yesterday, had a fun tax assessment recently. Basically, last year the assessment gave them a certain value for their house. First of all, this assessment didn't include the pool that was put in 20 years ago, or an entire additional bedroom and bathroom.

But here's the fun part. Last year, they assessed that the property was about 2/3 the total value, and the house was 1/3. This year the property lost a couple thousand in value, but now they'd assessed that the property was worth 1/3 of the total, and the house was 2/3.

WTF?

Apparently this was the case for everyone in town, and possibly the county.

It seems enough people thought this was stupid (especially since anyone who lives in this area knows that the land is far more valuable than any house you can put on top of it), and a couple months later they sent out new appraisals reversing the values once more.

Well, IANACPA, but it would seem like they were doing you a big favor. You can depreciate the building over X number of years, but you can't depreciate the land. Depreciation shields income from income tax, and since it's your home, you don't have to pay capital gains on quite a bit of it if you do sell.

Matthew

I suppose so, but I have to think it's a fairly big issue for some people in the area, who have 50 year old ranchers sitting on million dollar plots.

Bitt wants links. Unless you live in Houston or the handful of other places they do business, it won't do you much good, but the firm I use is O'Connor and Associates. Interestingly, these guys state up front that they take half of your savings as their contingency fee. I did a bunch of web surfing to see if I could locate competition for them. Several other local firms offer similar services, but none of them come right out and state their fees.

Understand that there are two types of assessment: The one the local government uses for tax purposes; and the one the real estate agent uses for selling the property.

Typically the tax assessment is less, sometimes considerably less, than the appraised value that would be used in selling the home. The tax assessment will be based more on what the taxing authority needs to run its operations than on the actual sale value of the home. If the local government decides they need more money (that could never, happen, right?) they will go out and re-assess the properties at a high enough valuation to bring in the revenue they want because often their percentage tax rate is capped by local ordinance. Fairness dictates that they be consistent, that is if they are assessing your home at 80% (or 150%) of what it might reasonably sell for, then they must apply the same standards to all the other homes in the taxable area.

Where I live, the taxing assessment generally runs at about 90% of what people get when they actually sell, and everybody knows that the assessed valuation for tax purposes only pertains to the asking price for the house as a comparative ratio.

tanstaafl.

It WAS 80% for my house.Not anymore.