In our tax grievance appraisal work we help people navigate the property tax system. It can be a confusing process…one indeed to “grieve” over (pun intended).
Our purpose here: to clarify how to determine if you are over assessed when your municipality assesses at a percentage of market value.
Also included:
1) Clarification of tax vocabulary from your tax bill
2) A method of determining the fair/full market value of your property actually used by your municipality.
1) Clarification of Property Tax Vocabulary
Fair/Full Market Value (Equalized Value)
This is the assessment of value assigned to your property. It should be the price a buyer would pay for a property in its present condition and the price a seller would sell that property for if neither party were under stress to do so. Caution! Do not use the full market value amount found on your tax bill to determine if you are over assessed. This amount may not be the full market value that is used by the municipality. For more information read on.
Assessed Value of your property
Most municipalities in Westchester assess at a percentage of market value (the uniform percentage of value). This means that if the assessor estimates that the full market value of your property is $300,000 and your municipality assesses residential property at 50% of market value, your assessed value would be half the full market value or $150,000. The assessed value is the starting point for setting the amount on which your tax is based. At this point, exemptions have not been deducted. The assessed value does not change unless you grieve your taxes or make improvements to your home.
Uniform Percentage of Value
Assessments, by law, must be made at the same percentage of market value for all property in the assessing unit. This percentage is known as the Residential Assessment Ratio (RAR) for residential properties and the Equalization Rate (ER) for commercial properties. The RAR is determined by the New York State Office of Real Property Services and changes annually depending on real estate market trends. It is usually available 60 days before the tentative assessment roll is filed. You can obtain your municipalities RAR from the Assessor’s Office. The RAR is an attempt to equalize the tax burden. It is based on the premise that all properties are accurately assessed.
2) Determining the Fair/Full Market Value of your property (used by your municipality)
To figure out if your property is over assessed you will need the assessed value of your property from your tax bill and the Residential Assessment Ratio (RAR) which you can obtain from your assessor’s office or the New York State Office of Real Property Services web site. Caution! Most tax bills use the Equalization Rate for commercial properties to perform this calculation and that typically results in a lower fair/full market value. If you don’t use the RAR you could be over assessed and not know it. USE THE RAR!
Divide your assessed value by the RAR. Since the RAR is expressed as a percentage, first convert it to a decimal by dividing by 100. So, if the RAR is 2.50% it becomes .0250. Then divide the assessed value by the RAR.
Assessed Value RAR (converted into a decimal) = Fair/Full Market Value
$10,000 / .0250 = $400,000
You are most likely assessed correctly if you believe the figure you calculated to be the accurate market value of your home. If, however, you believe this number to be too high and can prove that it is so, you can file a grievance with the Assessor’s Office.
To give a great lady her due, Carol Vergara of Carol Vergara & Associates contributed to the writing of this post.
An Appraisal Blog for Westchester 
Leave a Reply