Are yours too high? If so, here's what you can do:
Teran Realty is proud to be the largest and, I believe, the most successful firm in
Ulster County in the field of property tax reduction. Our work and expertise has
helped hundreds of property owners to lower dramatically the amount of their tax bills.
We charge nothing unless we win a reduction for our clients, and our fee is always far
less than the savings our clients receive.
Understanding Property Taxes
The only legal basis for the amount of your tax assessment for a particular year is the
market value of your property on January first of that year. In most towns in Ulster
County, the yearly property tax equals between 2.5% and 3% of the market value of a
property -- if the assessment is fair.
The problem of excessive and illegal taxation arises when the assessment is
inequitable. There are a number of reasons this can occur. Four common ones are:
- Overvaluation by the assessor: An assessor may believe a property is worth
more than it really is, and assign an assessment that is too high.
- Error by the assessor: As an example, one of our clients in 1995 purchased
the unfinished shell of a home for $11,250., but the property was assessed on a
finished value of $100,000., as a result, the taxes were nearly $3,000. per year. We
were successful in winning a more than 85% reduction for this client.
- Decline in the value of the property. Some properties in Ulster County
declined in value 30% to 50% in the last several years, but in some cases the
assessment has not been changed to reflect that.
- Unlawful procedures used by the assessor: Some assessors have openly
admitted to intentionally using methods of assessing that are not legal. In a 1994
hearing, an assessor stated to the grievance board, "We use replacement cost in
determining assessments." The case involved a home which sold for $62,000. which
was taxed on a value of $134,000., more than double what it should be. In that case,
as is common, the grievance board accepted the assessors opinion and lowered the
assessment not at all.
If you own a home which has an excessive assessment, cutting your annual tax bill is
not the only reason it is important to seek relief. A property that is over taxed is far
more difficult to sell for its fair market value; it is devalued by overassessment.
The irony is that the higher the assessor sets the assessed value over the true market
value, the lower is the market value of such a property.
For a Teran client who is selling a home, we will look at the assessment, and if it is too
high, assist in correcting it, to improve the value of the property. Unfortunately, while a
severe overassessment can almost always be corrected if one is willing to take the
necessary steps, it often takes a good deal of time to achieve, which limits its value to
one who is eager to sell.
For buyers, we will look at the taxes of prospective homes. If they are out of line,
either high or low, we will advise them of possible future scenarios. Why would we be
concerned if they are low? Because there is a good chance that after they buy, the
tax assessor will notice the discrepancy and increase the taxes. If the taxes are high,
we will advise them of the probable costs and outcomes of a petition to lower them.
Petitioning for a Fair Tax Assessment
First, the Bad News:
There are several steps in the process of securing a fair assessment. A reduction is
possible at any point in the process. The first steps are free, but unfortunately, in my
experience, usually futile.
A first step can be a meeting with your assessor to explain why your assessment
is too high. Sometimes, it can be as simple as that. Most of the year, with the
exception of a short period of time around "grievance day" (explained below) an
assessor can simply adjust your assessment if s/he agrees with you. If you plan to
meet with the assessor, you should understand the
equalization rate, and
know what it is for your town. Many of our clients have been given incorrect
equalization rates by their assessor, which fooled them for a time into thinking their
assessment was fair.
The first necessary step is to file a petition with the board of assessment review (the
"grievance board") on grievance day, which is one designated day each year, usually
in May. If you fail to file this petition on time, you loose your rights to lower your
assessment for an entire year. The grievance board is composed of lay persons.
Although its sole purpose is to grant relief from unfair assessments, in my experience
it fails miserably. Expect little here.
After losing your grievance petition, there are two avenues possible. For one's
primary residence only, going to small claims court for a $25. fee is an option.
This has the advantage of being inexpensive and fast (you may get both a hearing
and the decision within 2 months), but more often than not, it falls far short of justice.
The hearing officers are often ignorant of real estate matters, biased toward the
opinion of the assessor, whom they seem to look on as some kind of professional,
and, worst of all, decisions of this kangaroo court are not appealable.
The Good news:
If this sounds hopeless, take heart! If you can afford justice, there is an excellent
forum available: The Supreme Court of Ulster County. For a single homeowner, the
expense of bringing such an action can be daunting; it can easily run $1,000. to
$2,000. for legal and appraisal costs.
What I can do for clients is to gain both economy of scale and strength from numbers,
representing several property owners in a suit together. When this is possible, I pay
for all expenses; there is no risk whatever for my client. Since 1986, I have filed many
lawsuits against intransigent assessors for hundreds of clients.
Only when we win do I get compensation; then, my fee is a fraction of the tax
reduction in the first year. This year I represent 86 homeowners in the town of Hurley
in a Supreme Court lawsuit. With luck, my costs will stay under $15,000., but I expect
to reduce their tax bills close to $100,000. in total, every year, for a number of years.
Please see the following for additional information:
I am available to answer your questions about property taxes.
