3 ms·

Is it? How do other states do it? Here in the Netherlands it's the same, roughly judged based off average values in the neighborhood.

by tinco 5y ago

hamaluik 5y ago
Same in Canada.. always seemed fair enough to me and I assumed it was standard but now I'm curious how many other ways they are and how they shake out.
- LanceH 5y ago
  As for fair: There is little thought given to how much the individual house is worth, rather it relies on comp sales in the area. For example, a fully renovated house might go for $500k, but another in the neighborhood with the same number of bedrooms and bathrooms in a less desirable location (say the entrance to the neighborhood) might only be able to sell for $400k. It is also very common for the adjustments upward to be far quicker than adjustments downward. Then there are definitely examples out there of the city appraised value being driven by desired tax revenue and becoming detached from the reality of sale prices.
analog31 5y ago
In my locale, the assessment is pegged to the sale price, so if you buy a house for $X, the assessed value becomes $X. The city assessor also inspects the house shortly after the sale. In an area with a lot of turnover, the assessments tend to be fairly accurate. A major renovation (requiring a permit) will result in a re-assessment. In subsequent years, they're supposed to apply a formula, but of course "drift" can occur. And then there's an appeal process.
- aidenn0 5y ago
  > A major renovation (requiring a permit) will result in a re-assessment. Doesn't this just incentivize people to not pull permits on major work? In California contractors often try to talk you out of getting a permit because it's more of a hassle for them, so clearly the contractors aren't liable for doing unpermitted work...
  - analog31 5y ago
    It does, but it's usually the contractor who pulls the permit for you. I suspect enforcement is enough of a deterrent, but who knows. As I understand it, the penalty is that you get to rip out whatever was built without a permit. For DIY'ers, there's actually a nice program... once you pull a permit, you get to talk with the code inspectors during their office hours, and they will walk you through everything you need to do in order to meet code. A friend of mine built an entire addition this way. There's no way to hack-proof any taxation mechanism.
    - aidenn0 5y ago
      That's really nice. Here they just show up after the fact, tell you the first thing they find wrong and then leave. If it's not to code, it can take many visits to get a full list of issues.
hellbannedguy 5y ago
In CA, your tax is around 1 percent of the sales price. If you remodel, you are suspose to have your property reassessed.
- aidenn0 5y ago
  In California, your value is nominally bound to the actual value (i.e. it can be reassessed at any time). However, given that prices go up faster than the limits on raising assessed value in Proposition 13, in reality the tax is effectively "Sales price plus MIN(Inflation, 2%) per year" My current house was being taxed at a value of 1/8 of what I paid for it.

Is it? How do other states do it? Here in the Netherlands it's the same, roughly judged based off average values in the neighborhood.

by tinco 5y ago

Is it? How do other states do it? Here in the Netherlands it's the same, roughly judged based off average values in the neighborhood.

hamaluik 5y ago

Same in Canada.. always seemed fair enough to me and I assumed it was standard but now I'm curious how many other ways they are and how they shake out.

LanceH 5y ago
As for fair: There is little thought given to how much the individual house is worth, rather it relies on comp sales in the area. For example, a fully renovated house might go for $500k, but another in the neighborhood with the same number of bedrooms and bathrooms in a less desirable location (say the entrance to the neighborhood) might only be able to sell for $400k. It is also very common for the adjustments upward to be far quicker than adjustments downward. Then there are definitely examples out there of the city appraised value being driven by desired tax revenue and becoming detached from the reality of sale prices.

analog31 5y ago

In my locale, the assessment is pegged to the sale price, so if you buy a house for $X, the assessed value becomes $X. The city assessor also inspects the house shortly after the sale. In an area with a lot of turnover, the assessments tend to be fairly accurate. A major renovation (requiring a permit) will result in a re-assessment. In subsequent years, they're supposed to apply a formula, but of course "drift" can occur. And then there's an appeal process.

aidenn0 5y ago
> A major renovation (requiring a permit) will result in a re-assessment. Doesn't this just incentivize people to not pull permits on major work? In California contractors often try to talk you out of getting a permit because it's more of a hassle for them, so clearly the contractors aren't liable for doing unpermitted work...
- analog31 5y ago
  It does, but it's usually the contractor who pulls the permit for you. I suspect enforcement is enough of a deterrent, but who knows. As I understand it, the penalty is that you get to rip out whatever was built without a permit. For DIY'ers, there's actually a nice program... once you pull a permit, you get to talk with the code inspectors during their office hours, and they will walk you through everything you need to do in order to meet code. A friend of mine built an entire addition this way. There's no way to hack-proof any taxation mechanism.
  - aidenn0 5y ago
    That's really nice. Here they just show up after the fact, tell you the first thing they find wrong and then leave. If it's not to code, it can take many visits to get a full list of issues.

hellbannedguy 5y ago

In CA, your tax is around 1 percent of the sales price. If you remodel, you are suspose to have your property reassessed.

aidenn0 5y ago
In California, your value is nominally bound to the actual value (i.e. it can be reassessed at any time). However, given that prices go up faster than the limits on raising assessed value in Proposition 13, in reality the tax is effectively "Sales price plus MIN(Inflation, 2%) per year" My current house was being taxed at a value of 1/8 of what I paid for it.