Recent home buyers, come in . . .Property Taxes

How are your property taxes calculated? Our realtor keeps confusing us with this - she says that on mynassauproperty.com homes list the assessed values, which are often lower than the market value, and it is that number that is used to calculate your property taxes (or something to this effect, forgive me, we are thoroughly confused). So, she says that when we buy a home for a higher amount than the assessed value, the taxes will automatically go up - but I feel like this can't be true. Can someone explain it so that I understand? DH and I don't want to get over our head with taxes we can't afford!!

Re: Recent home buyers, come in . . .Property Taxes

Ok this is going to be long....

An assessment is nothing more than a percentage of market value. That percentage varies by a number of factors such as year, taxing jurisdiction (Nassau, Villages, and in Suffolk by Towns).

In Nassau County, the current "ratio" for single family homes is .25% Most homes in Nassau County are OVER assessed. Meaning that the County has your house valued at one thing (based on ratio/assessment, when the actual market value is less).

For example Nassau has a house assessed at $1,250. What that means is that they think the house is worth $500,000 (1,250 / .25% = 500,000)

Taxes would be calculated by:
Assessed Value X the tax rate = taxes due.

Now say that the home sells for $400,000. That house is OVER ASSESSED and you should grieve the taxes. The assessment on that house should be $1,000 reducing the overall taxes due.

Now as far as your REA's comments saying that if you buy a house for more than the assessment, the assessment will go up, she is completely incorrect. Nassau County does re-assess every year and there is a possibility that your assessment will increase, but it's not guaranteed. Depending on the real estate market, it may actually go down.

Also, Nassau County is planning to only re-assess every 3 years going forward.

As a general rule, your real estate taxes WILL increase every year. That's just a fact of living on LI.

HTH

Re: Recent home buyers, come in . . .Property Taxes

This is REALLY helpful - thank you so much - I almost understand it!! I'm going to FM you with a specific question.