Tax assessment valuation doesn't dictate market value


Dear Mr. Azrael,

For the first time ever in my experience [as an attorney], I have been consulted by a client regarding a lowering of the state assessment on three of her properties, one of which is her residence.

These properties are in the 1800 block of Madison Ave., and were assessed down from $111,200, $102,720 and $85,200, respectively, to $75,000 each. This area borders on what is known as Bolton Hill, where rates are much higher.

The owner feels this is a devaluation which will adversely affect the property values and market prices in her area, which many residents are attempting to upgrade, and is considering an appeal.

I would appreciate your giving me your thoughts and impressions as to whether she should appeal.

Leonard A. Briscoe


Dear Mr. Briscoe,

In my opinion, your client should not appeal the reduction of the tax assessment on her three properties.

Tax assessments are made every three years. The valuations for tax assessment purposes are based on an assessment worksheet that considers the replacement cost of the dwelling, less depreciation, adjusted by a Market Value Index, plus land value. This mass appraisal technique often does not comport with fair market value as applied to a specific property.

The tax valuation of property certainly does not determine its market value. A much better guide to market value is comparable sales. What have properties in the 1800 block of Madison Ave, sold for recently? How do those properties compare in size and condition to your client's properties? Recent sales data are a reasonably good predictor of how much a willing buyer would pay a willing seller for a specific property. This price can be substantially more than the assessed value.

The worksheet developed in assessing your client's properties can be obtained free of charge from the assessment office. It will show how the value of $75,000 was determined. The assessment office also will provide an area sales analysis showing recent sales of properties in the neighborhood.

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