If I bought my house last year will the property value be the same now?
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UPDATED: Jul 16, 2021
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Because of the methods used to assess home values, changes in similar properties will affect your property value as well. One property sale does not really determine market value. The price you paid for your home will be verified, but then it will be pooled with sales of similar homes. The appraiser uses this collected information to determine your property value. Each state also uses a different system for how home values are verified. Some states allow a certain flexibility between individual home values in the pool.
How can my property value change from year to year?
The changes in your property value may also depend on your state’s laws. For example, Connecticut requires property ‘revaluations’ at least once every five years. Massachusetts, on the other hand, is more earnest about property tax collection, and requires revaluation every single year.
Timing issues can also affect home values. Home values may change during a given year because of real estate market forces. For any number of reasons, a neighborhood or a particular house style may become very popular, thus causing home values to rise at higher than average rates. Some properties increase at a higher rate because they are more desirable to purchasers (e.g., located next to open-space land).
Inflation and the economy of the entire community also affect your assessed property value. As building material, labor, and the cost of money increase, the value of the existing housing stock also increases. Another factor affecting taxes are the levies voted and approved by property owners. These can vary from year to year and increase taxes as they are approved and added to the basic funding for a district.
How can I obtain an explanation of my assessed property value?
The goal of an assessor’s appraisal is something called ‘equalization.’ This translates into similar properties being treated equally. When an appraisal results in an increase in home values, and a spike in taxes, the assessor’s office is supposed to tell the homeowner about the increases. In other words, there are not supposed to be big surprises in changing home values that will cost taxpayers money.
Most places also allow an opportunity to appeal a valuation. If you are not satisfied with your assessed property value, you can usually file for an appeal through the local taxing board of equalization.