© 2013 All rights reserved. Chapter 9 Taxes and Assessments1 New York Real Estate for Brokers, 5 th e By Marcia Darvin Spada Cengage Learning

© 2013 All rights reserved. Chapter 9 Taxes and Assessments2 Chapter 9 Taxes and Assessments

© 2013 All rights reserved. Chapter 9 Key Terms  Ad valorem taxes  Appropriation  Approved assessing unit  Assessing unit  Assessment  Assessment roll  Assessor  Board of assessment review  Grievance  Homestead  In rem legal proceeding  Nonhomestead  Special assessment  Taxable status date  Tax certiorari proceeding  Tax exemptions  Tax levy  Tax lien  Tax rate Chapter 9 Taxes and Assessments3

© 2013 All rights reserved. Property Taxes Based on fair market value Most property subject to assessment and taxation Exceptions government religious educational charitable Chapter 9 Taxes and Assessments4

© 2013 All rights reserved. Property Tax Exemptions, Deductions, and Refunds Exemptions Deductions Refunds Senior citizen exemption Disability New York STAR Veterans’ exemption Chapter 9 Taxes and Assessments5

© 2013 All rights reserved. Assessed Value Assessor Assessment roll Uniform percentage Protesting assessments  Property tax assessment involves establishing the market value of each parcel of land to be taxed within the taxing unit  A taxing unit may be a city, town or county  Market value is what a willing buyer will pay a willing seller for the property Chapter 9 Taxes and Assessments6

© 2013 All rights reserved. Residential Assessment Ratio (RAR)  The RAR is an indication of the level of assessment for residential real property in a municipality Used by homeowners in a:  Board of Assessment Review (BAR) grievance  Small Claims Assessment Review (SCAR) hearing Chapter 9 Taxes and Assessments7

© 2013 All rights reserved. Functions Related to Real Estate of the Tax Assessor ۩ Valuing all taxable property -listing it on the assessment roll ۩ Maintaining tax maps ۩ Assisting taxpayers with exemptions ۩ Maintaining property tax records Chapter 9 Taxes and Assessments8

© 2013 All rights reserved. Equity Issues and Differences in Assessments Equity Issues Relationship of the building permit to reassessment Undeclared improvements discovered Old vs. new construction Community wide reassessment Reassessment upon Sale Illegal/ Legal Assessments Chapter 9 Taxes and Assessments9

© 2013 All rights reserved. Protesting Assessments Grievances Unequal Assessment/ Unequal Assessment Ratio Excessive Assessment- Full Value Disagreement Unlawful Assessment Misclassification- Homestead And Nonhomestead Classes Chapter 9 Taxes and Assessments10

© 2013 All rights reserved. Small Claims Assessment Review Residential only Filing with the county clerk Hearing procedure Types of evidence Appeal Protesting commercial property assessments- certiorari proceedings Chapter 9 Taxes and Assessments11

© 2013 All rights reserved. Tax Rate Formula Tax dollars required/ Taxable assessed value = Rate $2 million tax levy/ $40 million taxable assessed value = $5 for each $100 of taxable assessed value Chapter 9 Taxes and Assessments12

© 2013 All rights reserved. Chapter 9 Taxes and Assessments13 Calculating the Property Tax Bill Assessed value x tax rate = annual taxes $300,000 x = $13,701 If the assessed value of property is $68,000 and the annual tax paid is $850, what is the tax rate? $850 ÷ $68,000 = $1.25

© 2013 All rights reserved. Equalization Total assessed value (AV) ________________________ = Equalization Rate Total market value (MV) Chapter 9 Taxes and Assessments14

© 2013 All rights reserved. Real Property Tax Liens Real Property Tax Liens Administrative tax sale Tax foreclosure and tax sale Chapter 9 Taxes and Assessments15

© 2013 All rights reserved. Agent’s Responsibilities  Read and Interpret a tax bill  Know of any tax exemptions or reductions  Other information regarding the property tax is included in the title search Chapter 9 Taxes and Assessments16