How properties are assessed in Nassau County

Homeowners and business operators in Nassau agree: The county's property tax assessment system is quirky, confusing and mysterious. That's why so many of them file property tax challenges each year. Many win, prompting about $15 million in residential tax refunds annually.

Following are questions and answers about the residential assessment system based on interviews with Assessor Ted Jankowski and other experts:

HOW do they calculate my assessment?

It varies by type of property. Single-family home assessments are based on comparable sales to determine fair market value - what an unrelated buyer would pay - as of Jan. 2 of the assessing year. Assessments of condominiums over four stories are based on what the units would rent for if they were apartments in a rental building - not on sales prices of comparable units. Commercial properties - responsible for more than 80 percent of the approximately $100 million Nassau pays out each year for successful tax challenges - are assessed entirely differently. In broad terms, their values.

WHAT do you mean by comparable sales?

It's similar to when a mortgage bank says how much your house is worth by having an appraiser compare it to recently sold homes in your community. Nassau goes further by using a computer to compare your house to every residential sale countywide in the past two years. The computer then adjusts for 129 different factors, including time of sale, location, square footage and the age and style of the house. The county provides comparable sales on its assessment Web site, but only as examples. The sales listed are just a few of those used to calculate your assessment, Jankowski said.

WHAT IF I just bought my house?

Even if you purchased from an unrelated buyer on Jan. 1 - which seems like a good indication of fair market value for Jan. 2 - the county considers the sales price to be only one factor in setting the assessment.

HOW can you know if your assessment is accurate?

Nassau does not provide a list of actual adjustments or how they are calculated. "The computer models have always been mysterious," said tax appeal attorney Fred Perry. "They give no details of their methodology and their adjustments."

But Jankowski says homeowners can feel confident that their assessment is accurate by considering a statistic - called the "coefficient of dispersion" - which compares the overall difference between assessments and actual sales prices countywide. He said the current difference is well within assessment industry standards.

But the difference has been within standards since the county first reassessed in 2003 - yet tens of thousands of challenges continue to be filed, and Nassau hasn't been able to reduce the amount of money it refunds each year. For example, the "coefficient" didn't indicate in 2003 that waterfront and estate properties were significantly undervalued, even though officials acknowledged that at the time. Waterfront and large estate properties "are the hardest to value because not many of them sell and they're so unique," Jankowski said.

This is another area where the assessor and owners can disagree. The assessor may calculate that an investor will pay $1.3 million and accept a 7.5 percent rate of return while a wary investor, worried about risk, will only pay $1 million to get a 12.5 percent rate of return.

HOW can you tell if the commercial assessment is accurate?

That's a problem. Business income-and-loss statements are confidential and not open to public scrutiny.