Mat Su Borough Property Assessments—Should You Contest Yours?

Here is the article that I wrote and was published as an insert in the Frontiersman on February 25, 2007.  For more information about the Mat Su Borough Assessments, click here

Valley residents will start receiving their property assessed value notice beginning March 1, 2007.  Most folks are shocked to find out that assessed values are not appraisals. 

Assessed values for homes are usually based on the sales prices of other homes in the area, the size of the home and the quality of construction.  Typically, unless you invite the assessor into your home, they are basing their valuation only on what they can see and measure from the outside.  They don’t have the benefit of seeing the inside of your home.  Assessors typically are not able to visit your home every year and often times every three years is the norm.  Appraisers must view the inside of your home and compare your home to recent comparable sales, including foreclosures, short sales, and cash sales.  The appraisal process is very different from the assessment process.  It is rare that market value and assessed value are the same.  I have seen assessed values lower than the market value and I have seen assessed values higher than the market value.  The biggest misconception I see everyday is that most of the public has the perception that their market value is at least 15% higher than the assessed value.  This is not true at all, especially in a declining or slowing market.

I believe home value assessments for 2007 are going to be higher than actual market value in many cases, and this is going to be particularly tough for home owners.  When a market changes quickly, whether it is because of increasing sales prices or declining sales prices, the sales information available to the borough assessor’s office will always be behind the current market.  This is particularly true when the market is still growing at the beginning of a year and then slows down during the second half of the year.  So when you have a real estate market that begins the year growing and then ends the year declining (which is what happened here in the Mat Su Borough in 2006), property assessments assigned by the borough for 2007 will typically be higher than what the actual current market indicates.

So what can you do if you disagree with the borough assessed value?  First call and talk to the assessor’s office and see if you can resolve any differences with the assessor over the phone or in person.  If your concern is still not resolved, anyone who disagrees with the borough’s assessment can appeal their assessment within 30 days (by March 30) to the board of equalization.  Typically you must have compelling evidence to show why you disagree.  The burden of proof resides with the homeowner.  If the board of equalization agrees with you, the borough will change your assessed value.  It is important that you have good information to show the board when you meet with them.  I have actually heard of a few cases where the board, after hearing all of the information, actually raised an assessed value rather than lowering it.  That would be a shocker, wouldn’t it? 

Higher assessments don’t always mean higher taxes.  Each year the Mat Su Borough Assembly meets in late spring (typically May) to establish the mill rate (tax rate).  To determine the mill rate, the borough calculates the total amount of money needed to fund the government and divides that amount by the total property assessments for all of the Mat Su Borough properties.  Each person’s individual tax bill is then calculated by multiplying the mill rate by the property’s assessed value.  If your assessment has gone up from the previous year, but the mill rate is less than the previous year, your taxes may not go up at all.