Fridays with the Fiddle Fig: Assessed Price Vs. List Price
"Why is the price of the home different than the assessor's record?"
Oftentimes when you're buying a house the sellers have owned it for some time or have done some significant updates during their time in it. So when you go to buy the house and look up the assessed value of the home on the assessor's record it may tell you a lower price than what the house is actually worth.
A prime example is if someone purchased their home back in the 70's and have lived in it during childhood and then inherited it from their parents, they might have a tax basis on that house of $70,000 and yearly taxes of around $800-$1000. And as soon as you buy that house that triggers a notice to the county assessors to come out and reassess your house. So what they'll do is look at what you purchased it for, reassess what's on the property and then add a new tax value to your property which will determine what your new tax base will be. There are a few things that go into this but, for the most part, it's determined off of the purchase price.
This isn't quite as significant of a step in the process for sellers because it doesn't really apply to them. But one thing to keep in mind is that making any upgrades to the house and pulling permits can cause a reassessment of your home and that can increase your property taxes over time. There are some programs that allow you to transfer that tax base one time in your life (if that's something you want to know more about, let's chat).
That's it for this week! As always, we're open to any questions that pop up, just send them our way! Looking forward to being back again next week!