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Why Your Home’s Tax Assessment Does Not Equal its Value.

housevalueWhile your home’s annual property taxes are determined by your assessment, which in turn is a percentage of your home’s appraisal, that valuation can be very much out of date. It is not indicative of your property’s value in today’s marketplace.

Not so long ago, the state mandated revaluations were every ten years. Each home was valued, and every commercial building was valued, or assessed. However, during the course of only a few years, the percentages of what is fair to tax homeowners, businesses, and commercial enterprises changed significantly, and one or more of the three different subsets could be paying much more, or much less, than their appropriate fair share.

In recent years, however, Connecticut mandated that each of its 169 towns and cities re-assess your property’s value every five years. The reason for the five year revaluation process is the constantly fluctuating real estate market.

To further add to non-reliability of your home’s assessment to its current value, the actual timing between evaluations is compounded by the interior access issue. Sometimes the appraisal company performing the task will ask to gain entry into a home. However, most often they do not request an interior inspection.

Consider the sheer number of properties in your town, and think about the probability of any company obtaining access to each and every home. Also consider that sometimes an owner or previous homeowner did not permit entry, or was not available when the company requested an interior inspection.

For additional clarification, the property tax on your home is determined by its appraisal. In Connecticut, your property assessment is equal to 70 percent of its appraised value at the time of valuation. So, if your home is valued at $1,000,000, your assessment (or the amount that you would pay taxes on) would be $700,000, and that is multiplied by your towns mill rate in order to arrive at your current annual property taxes.

It should also be noted that online house value estimators utilize the assessment in their algorithms to determine a price for your home, so they are certainly not as reliable as one might think.

So the short answer as to whether the town’s official appraisal on your home is accurate in today’s market depends on exactly when it was done, and whether access was granted or not. If you are one, two or three years out from the last “official” appraisal, then do not rely on that number for current market value. Best to contact a local Realtor or appraiser.

Judy Szablak