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Originally Posted by secondcurve
The value of a property has always, and will always, be comprised of the components you mention, land, structure, view, etc. Nothing has changed. The appraisers simply now break out the value amongst the components. However, I bet they wish they never went down this path!
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I agree. As I understand it, the purpose of an assessment is to approximate the market value of the property. This will never be a perfect process because the market value is extremely dynamic. The thing I look for in a "fair" assessment is a transparent assessment formula backed up by facts. The facts are the kinds of rooms, square footage, and trim levels and condition of your property. This should be combined with actual property sales of similar properties. It worries me when assessors make "adjustments" when people complain if there is no change in the underlying facts. That implies the original assessment was whimsical.
Higher assessments for "desirable" properties has always been part of the system. This is where the sales of "similar" properties comes in. On the lake I have a small 2 bedroom house. In Hudson my house is 3 times the size of the lake house. The lot sizes are approximately the same. The lake porperty is assessed at more than the Hudson house. Call it a view tax, great property tax, envy tax, or whatever, the reality is that I can probably sell the lake property for more than the Hudson property and the "assessment" reflects that.
A lot of the pain and complaining about property taxes is now coming about because the courts have said that if the property tax were to be considered a normalized tax across the whole state everyone would need to have frequent reassessments. There has been considerable pressure on towns to carry out these assessments, some of which have not been done in a LONG time. Long time property owners have often benefitted from this assessment neglect and now reality is setting in.
Like it or not, the people that are complaining about these taxes are wealthy. They have a valuable piece of property. If they sell it and move to a less "desired" piece of property they solve their problems in two ways; they no longer owe the taxes and they have pocketed a nice profit (which, if it is their primary residence, they pay no tax on). As an alternative they need to earn enough income to pay their taxes. Say their taxes are $15,000 on a property assessed at $1,500,000. What's so bad about that? If the property continues to appreciate at 2% a year (a conservative estimate) they make $30,000 a year on appreciated value. If they want to keep the property in the family, hit up the kids for some help with the taxes. How about a reverse mortgage? I understand that no one wants to be pushed out of their home but if it's that important there are options and in the worst case the sale of the property yields significant assets.
If I buy a stock or mutual fund and hang on to it for 30 years it will probably become quite valuable. However, I can't both keep the stock and reap the value at the same time. People don't live in stocks or mutual funds but many romanticize about their housing property, claiming some special rights of ownership because it's "their house". If they want to do that, great, but they need to understand what keeping that housing property under any and all conditions really requires and plan for it. How are we supposed to feel when they need to have their roof fixed and they can't afford that either? or a new well?, or a new septic system?