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August 8, 2009

Property reassessments out of cycle

Wonk reader Wick asks, "If I buy a Baltimore City home that is assessed at 100k for a purchase price of 200k, and the home was just assessed (11/08, at 100k) so is not due for re-assessment for 2 more years, will they reassess as soon as I buy the home? Or, will the 100k assessment hold until next 3-year assessment is due, and by then I'll be protected and can apply for homestead credit?"

I put the question to the state Department of Assessments and Taxation. Henry Sikorski, state supervisor of assessments, said Wick doesn't need to worry -- unless there's recent new construction on the home that the state hasn't assessed.

The state will do assessments out of cycle for major work on a home, typically over $100,000 in value. It will also reassess if a vacant lot is built upon or if the property use changes, say from commercial to condo, Sikorski said.

Paying $200,000 for a home the state assessed at $100,000 doesn't in itself prompt the state to come swooping in. "We don't go in and reassess on sales," he said.

Hope that helps, Wick (and anyone else out there pondering the same thing). Oh, and don't forget to apply for that homestead credit. New buyers have a six-month window.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (7)
Categories: Homestead Property Tax Credit, Property taxes


"Wick doesn't need to worry -- unless there's recent new construction on the home that the state hasn't assessed."

and how will the State know of such improvements?

If you pay 2X the assessed value of anything today you can be sure that all sort of alarm bells will be going off and not just at SDAT (who will then check to see why the difference exists).

What about if it happens the other way?? The property is assessed at $350K and you buy it for $175K.

Now you WANT the state to reassess to get your tax back down where the market has fallen.

What happens in this situation? I ask because I'm looking a number of properties that I can buy for well under the assessed value and I worry about having to pay the high tax.

Thanks for the great blog!

fronesis, as you suspect the State is not set up well for actions that would lower the states income.

There are a lot of anecdotes floating around of people challenging an assessment but each such story is much more recounting a lone effort at blazing new trails through the bureaucratic forest rather than a how to lesson.

Thanks, MrR. That was what a I feared - that the only real option is to challenge the assessment based on the new purchase price...and then hope that the State sees reason (but that's a big hope since it costs them money).

Sorry, fronesis -- wasn't ignoring you, but it's been frenetic around here. MrRational is right: You would need to appeal the assessment. Here's what the state says about that:

"APPEAL UPON PURCHASE: If you purchase a property and the property is transferred after January 1 but before July 1, you may file an appeal within 60 days of the transfer. After filing a written appeal, you will be scheduled for a hearing; or, if you prefer, your written appeal can be reviewed instead of having a hearing. "

More appeal details here:

Thanks, Jamie! I really appreciate it...

Earlier I mentioned anecdotes:

"I went to the assessors office to protest the taxes on one of my rental houses. The taxes had gone up 300 percent. I noticed they had the house listed with a shed in the back yard and 2 bathrooms. There is no shed and only one bathroom. The assessors went to the house and found there were other things they did not have listed such as a small concrete patio off the double doors in the back, a very small add on to the back of the garage and an overhanging awning attached to the front of the garage. The assessor informed me yesterday that instead of my property value going down, it is going up $2,000.00. Be careful what you ask for cause it may just bite you back."

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie

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