Property Tax Reassessment and Back Taxes

[sengsational]

I'm sure this differs state-by-state and even county-by-county, but I wondered if it's common or uncommon for a change in valuation by the assessment authority to cause the taxing authority to come after you for back taxes. This is just residential real estate, and in a single-builder neighborhood, so pretty plain-jane situation.

Here's the "trick" they used on me: Between the last assessment and the current one, they more than doubled the non-living square footage value (that area includes the garage, deck, porch, etc). This non-living area is not documented in their system (it's shown to the public as just a figure, without backup calculations). The living area square footage is documented with a diagram. This assessment has left that square footage unchanged. When I opened an informal complaint, that triggered a call to schedule an appointment to could come out an measure.

It is true that the records from the old valuation do not match reality and that there are both discrepancies in their favor (higher valuation) and in mine (lower valuation). The net discrepancy between the old valuation and reality, though, is currently in my favor. I don't mind having the records corrected to match reality, but I would mind if the taxing authority took the action to try to figure out when the discrepancy occurred and bill me for the difference! So I wondered if anyone has heard of this (back taxes after a reassessment) happening...how common that might be. If it's a possibility, I'll probably hire an attorney. Although I read everything they have on their web site, there is no content that addresses "what are the owner's rights" that I can find. I don't know if I'm required to grant them access to the exterior or both interior and exterior. If I don't go with a lawyer, I think I'll simply not answer any of their questions if they ask, just in case they find a way to use something I say to support any future case against me.


I did find that there's a thing for retired / low income to save on property taxes, but I don't qualify on age or income.

 

[MissMolly]

I worked in the mortgage industry for almost 30 years in which we were responsible for paying annual real estate tax bills for thousands of homeowners. There would be regular reassessments done on properties periodically but never in all those years did I ever see the taxing authority come back with a claim for back taxes due to a reassessment.

 

[sengsational]

Thanks. You were in a concentrated position of visibility to such things and didn't see it....That's good news.

 

[RE2Boys]

I once saw a taxing authority come back for back taxes when a new home was built but the added value to the parcel was inadvertently not added to the tax roles. Only went back to the previous year.

 

[sengsational]

Missing an entire house and going back one year...that doesn't seem unfair. The discrepancies in my case are small potatoes, but it would add-up if they arbitrarily said their records have been wrong since I bought the place.

 

[akck]

I’d guess there would be a look back period where they may be able to collect back taxes, which should limit your liability. However, it’s more likely that the assessment will be from this point forward, i.e., no back taxes.

 

[W2R]

I never heard of that happening here.

But also, in my location they mostly re-assess due the house being sold, or else due to permits being obtained for a major construction/renovation. They don't normally re-assess for other reasons.

There are a lot of little old ladies here who have lived in their homes for 50 years, with their last assessment having been done in the 1960's. We have a $75K homeowner's exemption so they don't have to pay a cent in property taxes. Doesn't bother me, though, because I'll be older one day too.

 

[sengsational]

But also, in my location they mostly re-assess due the house being sold, or else due to permits being obtained for a major construction/renovation. They don't normally re-assess for other reasons.

There's a state law here that says they need to reassess at least every eight years. There are people complaining that they working the timing for when prices are the highest.

 

[Brat]

If you live in Oregon I can send you the name of a lawyer who specializes in property tax assessments.

 

[sengsational]

I poked around looking for a lawyer near me. I found a couple of web pages, but it looked like they wanted to represent the person at the formal hearing. I figured on letting things go this year (maybe live with an unrealistically high assessment for one year), but buying services (at least my own appraiser) next year.

 

[Brat]

There is more involved than that. You need someone who knows how your property tax assessment works. Most lawyers will offer an hour for free or reduced price to determine if your issue is something worth your while. I live in a multi-family building so we are talking real money here, the attorney's fee was based on a % that we saved.

 

[Bamaman]

If you or your wife is disabled, moved to Alabama. All property taxes are waived on the main residence for the disabled.

The savings on our city home covers the property taxes on our lakefront home and utilities for the whole year.

 

[sengsational]

There's a disability thing in NC too. I didn't look into how "juicy" it was, just saw it in the table of contents. The age-related one in NC, you have to be 65 and broke. So, thankfully, nobody's disabled or broke, and still have a while before 65.

 

[Another Reader]

In California, escape assessments can be made for four years. However, they are triggered by missed changes in ownership or unassessed new construction, whether permitted or not. For example, if you converted your garage into living area several years ago without a permit, you could be assessed for the difference in value between a garage and your new living area, adjusted for any deficiencies because it was a garage previously. The escape assessments would be issued for the current tax year plus three prior years.

 

[CRLLS]

If it is true that

there are both discrepancies in their favor (higher valuation) and in mine (lower valuation). The net discrepancy between the old valuation and reality, though, is currently in my favor.

then you would be getting a refund for all of those back years rather than you owing. Maybe I misread that?

 

[pb4uski]

I've never heard of anything like what you are so concerned about. Typically such adjustments are only prospective. IMO you're in great shape if this is a significant worry for you.

 

[sengsational]

If it is true that then you would be getting a refund for all of those back years rather than you owing. Maybe I misread that?

My favor, meaning saving me money. I figured that might be a point of confusion, so I tried, not very successfully to lay it out with " in their favor (higher valuation) and in mine (lower valuation)". To confuse matters, it's only in my favor as long as a future buyer doesn't use the valuation to influence the price offered to me when I sell!

 

[sengsational]

I've never heard of anything like what you are so concerned about. Typically such adjustments are only prospective. IMO you're in great shape if this is a significant worry for you.

Ain't nothing but something to strategize on to get the best outcome. You, of all people, should appreciate that

 

[sengsational]

The escape assessments would be issued for the current tax year plus three prior years.

That's the first I've heard of the term "escape assessments". "Bad news" to me, but thanks for that.


EDIT: Did a bunch of searching and didn't find any reference to that term with reference to NC, so if it's a "thing" here, it's probably called something else.

 

[Another Reader]

This applies in California. Rules in other states will differ.

 

[ncbill]

There's a disability thing in NC too. I didn't look into how "juicy" it was, just saw it in the table of contents. The age-related one in NC, you have to be 65 and broke. So, thankfully, nobody's disabled or broke, and still have a while before 65.

In my county here in NC, over age 65 & under $30,000/year total income (counting SS/pensions) & property taxes are cut in half, no disability required.