This column usually addresses legal matters related to estate planning and elder law. This time of year, however, I sometimes get questions related to challenging property tax assessments. I thought it would be useful to review some of the basic rules of the road for those who are considering a property tax assessment challenge this Spring.
The property tax assessment challenge procedure has a variety of terms and concepts that can be difficult to understand, such as: taxable status dates, equalization rates, and valuation dates. For those not familiar with the rules, it can lead to confusion and misunderstanding. Below is a brief Q&A that I hope will bring some clarity to the process.
What is an equalization rate?
An equalization rate is the State’s measure of a municipality’s level of assessment. The equalization rate varies by municipality, and it is a percentage of full market value of the properties in a municipality. For example, the 2021 equalization rate for Saratoga Springs is 61%. So – in a general sense, properties in Saratoga Springs are considered by the State to be assessed at 61% of their full market value. For example, if your house is assessed at $200,000, then that equates to a full market value of $327,869 ($327,869 x 61% = $200,000). If you look at your most recent property tax bill (which relates to last year’s assessment roll), you will see an “assessed value” and a “full market value” listed for your property.
Why isn’t the equalization rate 100%?
If your municipality’s equalization rate was 100% last year, then your assessed value would equal your full market value in this year’s tax bills, which were recently sent out. In some municipalities this is the case. In fact, in Saratoga County, about half of the cities and towns have an equalization rate of 85% or greater. Equalization rates can drop from 100% over time if the municipality does not conduct a general reassessment of all properties and property values rise over time. The last city-wide revaluation in Saratoga Springs was done in 2005.
Why is the equalization rate important?
It is important because you need to understand the difference between your assessed value (which may stay the same over time if the Assessor does not change it) and the resulting full market value after the equalization rate is considered. If you want to decide whether or not to challenge your assessment, you need to look at the full market value on your assessment and decide if you think that is higher than the fair market value of your home.
If I want to challenge my assessment, what do I do?
If you want to challenge your assessment, you need to file an RP-524 form with your local Board of Assessment Review by Grievance Day, which is usually the fourth Tuesday in May. Grievance Days can vary, so it is best to check with your local assessment office. More information is available at www.tax.ny.gov/pit/property/contest/grievproced.htm.
What happens after I file my grievance?
The local BAR will review it and decide whether to keep your assessment the same or lower it. The BAR will generally allow you to appear before them on Grievance Day to explain your argument.
What if the BAR doesn’t lower my assessment?
If you are grieving the assessment for your residence, you can appeal the decision in a Small Claims Assessment Review (SCAR) hearing before an independent hearing officer. At that hearing, you will be able to make your case for a lower assessment, and the Assessor will be able to respond. If the property you’re grieving is not your residence, you will likely instead have to file an Article 7 petition challenging your assessment in Supreme Court.
Do I need a lawyer to challenge my assessment?
You generally do not need a lawyer, unless you are filing an Article 7 petition in Supreme Court. It is advisable, however, that you hire an appraiser to do an appraisal of your property to support your argument.
What is a taxable status date and a valuation date?
For the 2021 tax assessment roll, your property will be valued as of a valuation date of July 1st of the prior year – so July 1, 2020. It will be valued as of what is physically there as of March 1st of the assessment year – so March 1, 2021 for the 2021 assessment year.
Why are these dates important?
If you hire an appraiser to appraise your property for an assessment challenge in 2021, you should tell them to appraise it as of what was physically there on March 1, 2021 but with a valuation as of July 1, 2020.
How do I know if I should challenge my assessment?
Over the years, I’ve had many people tell me they think their taxes are too high and that they want to challenge their assessment. I usually ask them this question in response – If you were to sell your house tomorrow, would you sell it for less than the full market value listed on your tax assessment? If the answer is no and you would expect to get more, you are likely not going to challenge your assessment and win. If your answer is yes, and you think you could likely not sell it for the full market value listed on your assessment, then you should talk to an appraiser and potentially consider a challenge.
Equalization rates, valuation dates, assessed values, full market values, and on and on – it can be quite confusing. Hopefully, this Q&A will allow you to navigate the terms and procedures and help you understand whether an assessment challenge makes sense for you.
Matthew J. Dorsey, Esq. is a Partner with O’Connell and Aronowitz, 1 Court St, Saratoga Springs, NY. Over his 23 years of practice, he has focused in the areas of elder law, estate planning, and estate administration. Mr. Dorsey can be reached at 518-584-5205, This email address is being protected from spambots. You need JavaScript enabled to view it., and www.oalaw.com.
