The Kenai Peninsula Borough tax assessments are in the mail and some of us are in for a big surprise. The assessment on our house was up $17,000 over last year and after hearing from a some of our clients, I think we got off easy. Clients have been calling in to say that theirs are up $50,000 or $100,000. That’s a lot.
First of all, let’s talk about what a tax assessment is. An assessment is the value placed on a property by the town or city’s assessor’s office for the purpose of determining the property tax due. It is the borough assessor’s “estimated price the property would bring in an open market and under the then prevailing market conditions in a sale between a willing seller and a willing buyer both conversant with the property and with prevailing general price levels.” That’s a mouthful.
I read an article this afternoon that talked about assessments were based on a borough’s budget and the need to make up a difference. I wrote about it but though I’d update this post because what I read seemed a little simplified. What the writers of the articles I was researching were alluding to was assessment ratios. To arrive at your assessed value, an assessor takes what they think a fair market price is for your property and multiplies by an assessment ratio – and that becomes the assessed value of your property. Multiply that by your Mil rate and that’s how they get your tax bill.
Ever year we see appraisers from the borough assessing department tromping though our neighborhood conducting their inspections. They are collecting and verifying property descriptions and trying to identify anything that affects a property’s value.
Why so high this year? Are we seeing a change in the assessment ratio?
Is the sale price of my house related to the tax assessment?
No. There isn’t much correlation between what the borough thinks your house is worth and what you can sell your house for. Market values in Homer at least are based on the last year’s data so they’re often a year out of date. So don’t be fooled by real estate ads that say a property is listed below assessment – have your realtor run a comparative market analysis for you based on current market conditions.
So what do you do if you think your property assessment is too high? Your first step is to get in touch with the Borough Assessment office and speak with a member of the appraisal staff. Often times an adjustment can be reached before an appeal is necessary.
You can reach the assessor’s office at (907) 714-2230. You have 30 days to file a written appeal to the Board of Equalization, so don’t delay.
**Update: Representatives from the borough tax assessors office are coming down to talk to Realtors on the 15th to explain what’s happened. I’ll update with the results of the meeting.