The crippled real estate market should make most everyone's property values take a nose-dive this year. The one silver lining - you might have a shot at lowering your property taxes.
By now, Nassau County residents should have received a "Tentative Assessment Value" notice in the mail from the county assessor. (Suffolk residents will receive theirs by May.) Don't trash it: It shows whether the assessor has valued your home at more or less than the last tax year and how much the value has changed. If you think you've been overassessed, you have a right to protest the assessment - which could mean tax dollars in your pocket. Below are answers to 12 questions commonly asked about filing a grievance.
1. What is a property tax assessment?
Every year the Nassau County Department of Assessment or each individual town assessor's office in Suffolk County determines a value of your property. This serves as the basis for what your property taxes will be in the coming year - in this round, for 2010 and 2011. (The new assessment in Nassau will be based on January 2009 house values and is used to calculate school tax bills issued in October 2010 and general tax bills for January 2011; in Suffolk, the new assessment will reflect property values as of July 1, 2008, for your December 2009 tax bill.)
You want to make sure that your assessment reflects the fair market value of your house, says John Peguillan, chair of the Assessment Review Commission of Nassau County, an independent organization that hears appeals for reductions in your assessment.
2. What is fair market value?
That's how much the county assessor says your house is worth as of a certain taxable status date. (See No. 9 for deadlines.)
What is the adjusted market value?
This is the value of your home that reflects any exemptions and adjustments - veterans, senior citizens (65 and older), STAR, persons with disabilities with a limited income or physically disabled - as well as adjustments for home improvement and businesses. This adjusted market value is multiplied by the "level of assessment" to help calculate a portion of your property taxes.
3. What is the adjusted market value?
This is the value of your home that reflects any exemptions and adjustments
veterans, senior citizens (65 and older), STAR, persons with disabilities
with a limited income or physically disabled as well as adjustments for home improvement and businesses. This adjusted market value is multiplied by the "level of assessment" to help calculate a portion of your property taxes.
4. What is the level of assessment?
This is the percentage of market value at which properties are assessed. (For example, in Nassau for the past five years, the level of assessment has been .25 percent for Class I properties, which include one-, two- and three-family houses and condos of three stories or less.) In Suffolk, the level of assessment varies by town. Last year, the level of assessment in Riverhead was 11.09 percent; in Huntington, it was .75 percent.
5. How is an assessment calculated?
If the fair market value of your house is assessed at $754,800 and the level of assessment is set at .25 percent, your tentative assessed value is equal to $754,800 multiplied by .25 percent, which equals $1,887. This is used to calculate your taxes.
6. If my assessed value goes down, will I pay less in taxes?
"If you think your home is assessed too high, and you successfully prove that the value is less, then your tax bill can go down," says James Donovan, chief executive of Good Grievance, a tax-reduction company in Ronkonoma. Your assessment can't go up; it can only be decreased or remain the same. (But see No. 10 for a caveat.)
7. How can I learn more about my assessment?
In Nassau, the "Tentative 2010/2011 Assessment Roll" is available at the Department of Assessment's fourth floor offices at 240 Old Country Rd. in Mineola. To review information specific to your property, as well as all others, you can also go to the department's Web site at mynassauproperty.com and follow the link to "Property Search." The department is open from 8 a.m. to 4:45 p.m. Mondays through Fridays if you need help in person.
Suffolk properties are assessed by each town. For information about your town, go to the Municipal Profiles link at www.orps.state.ny.us (the Office of Real Property Services). Then go to your town assessor's office for details.
8. I think my assessment is wrong, now what?
If you think your assessment is too high, or if you want to challenge your property's tax classification or exemption status, you may file an "Application for Correction of Property Tax Assessment."
9. What are the deadlines?
The grievance period for Nassau is between Jan. 2 and March 2 for the 2010/2011 tax year. To get an application, call the Assessment Review Commission at 516-571-3214 or go to nassaucountyny.gov/arc.
Each town in Suffolk publishes its Tentative Assessment Roll by May 1. It is then available at the local Town Assessor's office. Residents may start challenging the assessment from May 1 to May 19. On May 19, each town has an assessment hearing. Each appeal is reviewed on a case-by-case basis, and homeowners can attend - only those who appeal will have their assessments reviewed. Keep in mind that in Suffolk the May 19 deadline covers house values as of July 2008.
10. Should I have my home appraised before I apply?
Some tax-grievance professionals suggest not only including house photos, letters or anything else you feel will help your case, but an appraisal. When you file, you must show three comparable sales (or comps) to help determine your property value. "But there are properties selling very low because they are distressed sales [foreclosures, short sales or sales between family members]," says Donovan of Good Grievance, "and those properties can't be used to show that you are overassessed. A licensed appraiser, however, can recognize and eliminate these potential problems before an application is submitted." But beware: An appraisal, which costs about $350, could raise a red flag for changes you may have made to your house that may not be up to code or approved by the town, says Shalom Maidenbaum, founder of Maidenbaum Property Tax Reduction Group, LLC, in Cedarhurst. This, potentially, could lead to higher taxes, he says.
11. Can I grieve online?
Yes. In Nassau, you can log on to nassaucountyny.gov/arc and click on the AROW link (Assessment Review On the Web) on the left to file your appeal online. According to the Assessment Review Commission, this is the quickest way to appeal. Have on hand your section, block and lot number, which can be found on your tax bill. If you don't know these, you can enter your parcel or address. There is no fee to file online or by mail.
In Suffolk, the process is more complicated, says Donovan, because there is no online access to property information and because assessing is done separately by each town. The best way to get the process started is to call your local town assessor's office or go to www.orps.state.ny.us .com.
12. Can I hire someone to file a grievance for me?
You don't have to. "It is by no means necessary to have a tax- reduction company file your grievance for you," says Jeanne Nielsen, chair of the Board of Assessors for East Hampton. "The statute is written so that homeowners can file on their own. Most board of assessor's offices are willing to go out of their way to help homeowners apply - they'll make it easy to find the comps and help you with the application process." However, she adds, "Many homeowners are not comfortable with the process. They don't want to do the legwork, don't want to be bothered, or don't want to lose time from work if they want to appear before the assessment review board....For these homeowners, a tax-reduction company may be the best way to go."
The first step in the process is not as hard to do by yourself - making the reduction request with the Assessment Review Commission in Nassau or with the Board of Assessment Review in Suffolk. But once that is complete, and if your request has been denied, you still are entitled to file an appeal. The State Supreme Court's filing fee is $30. The standard fee for using a tax-reduction company is 50 percent of the tax savings for that year (but only if they successfully reduce your taxes - if they don't get a reduction, the only charge is the court filing fee).
"I have two concerns," says Maidenbaum. One, he says, is that people who are denied or have their assessment only partially reduced are "lulled" into believing "that's the end of the road."
When the assessment becomes final, those who haven't settled or signed away their right to appeal can either wait until next year (you can grieve yearly) or are able to go to the Small Claims Assessment Review, which is the housing division of the Supreme Court. "Now, it's the taxpayer versus the county in Supreme Court," says Maidenbaum, "where both sides present evidence and a final decision is made. Thousands of reductions are made after filing appeals" each year.
Maidenbaum says home assessments on Long Island have been reduced aggressively by the Nassau and Suffolk assessor's offices to reflect the market crisis. But his second concern is about the "level of assessment," which he warns is not accurate.
"Level of assessment is tricky and key to lowering your taxes. I'm concerned that people will look at their adjusted market value and think, 'Oh good, I'm underassessed.' The question should be, 'Am I underassessed enough in comparison to all my neighbors?' And, if the level of assessment was proved to be less, it could lower my taxes," he says.