How Does The Assessor Determine The Value Of Your Property?February 20, 2014
Property Tax: FCV vs. LPV – What’s the difference?August 19, 2014
On November 6, 2012, voters approved Proposition 117, which amends the Arizona Constitution to simplify the calculation of property taxes and limit the annual increase in the value of property used to calculate property taxes.
Beginning in 2014, the ballot measure will cap this value at no more than 5% above the previous year’s value, and establish a single limited property value for property tax purposes. The 5% limitation would apply to property values used in determining all property taxes on real property so in effect, the value used will either be market value or 5 percent more than the previous year’s value, whichever is less.
You will receive your first Notice of Value reflecting this change in February of 2014 so this year will be your last opportunity to appeal the full cash value of your property under the current statutory guidelines before the new valuation system begins. You need to aggressively appeal your valuations this year to get them as low as possible.
This year’s final valuations will be your baseline for determining your future valuations. Next February’s valuation will be limited to no more than 5% above this years’ final valuation. Lowering it this year can be particularly important in a rising real estate market where it will become increasingly difficult in future years to find low sales comparables to support a decrease in your tax valuations.
Let’s say you feel your property is over-valued on this year’s assessment and with a well-constructed appeal you are able to reduce it by 10% from $1,100,000 to $1,000,000. Let’s say that would save you about $2,600.00 in taxes. But that’s not all. In a fast rising real estate market your valuations next year would likely increase but that increase would be limited to 5% to $1,050,000 rather than the actual gain of 10% or more that you might see in a recovering market. If you did not appeal and lower your valuations the previous year, your baseline would be $1,100,000 and would also likely increase by 5% to $1,155,000, costing you another $2,700.00 more in taxes than you would have paid if you had successfully appealed the year before. Furthermore, with sales prices having risen in the past year it will be more difficult to find sales comps to support a reduction next year and you will be stuck at a higher valuation and tax bill each year until the market slows its increase in values.
There is a limited time to appeal your tax valuations. At Anthony Liberatore & Associates, LLC we can appeal your valuations and make sure that they are as low as possible. For over 30 years we have been a leader in the field of tax reduction with analysts, realtors and attorneys that specialize in property tax issues. If we don’t reduce your commercial values there is no cost to you. Please contact us at480-838-7175 to appeal your Arizona property tax.