Hghland Township-wide Reassessment: My Thoughts

I've gotten about a dozen emails and phone calls from homeonwers in Highland Township freaked out about the property valuation reassessments they received recently from the Highland tax assessor. Some have seen dramatic jumps in their assessments; I've heard through the grapevine that some owners have seen their assessments more than double, while others have seen more modest hikes.

Most people I talk with are under the mis-impression that, say, a 50% hike in their assessment will translate directly to a 50% hike in their property taxes. But that isn't how the system works. Townships are supposed to periodically review all the properties in the township and adjust assessments to bring them to market value (or some agreed upon percentage of market value). That's just what Highland has done. Without a periodic township-wide reassessment, some properties have assessments that remain well below their market value, while other properties (particularly new construction) are assessed closer to market value and bear an unfair tax burden.

When the tax grievance process is complete (sometime this month), the assessor will have a final tax roll. That's the total of the assessed property in that township. Let's say, for the purposes of argument, that prior to the reassessment the total tax roll in Highland Township was $50 million and after the reassessment it is $100 million. That doesn't mean that taxes will double because the township then takes its total expenses and divides that by the tax roll to get the tax levy — effectively the tax rate. So if the township expenses were $1 million and the tax roll was $50 million, the levy rate was 2%. Now, with the tax roll doubling, that same $1 million budget would result in a levy rate of 1%. There are also other entities (county and schools) that rely on the assessment to levy taxes and there are complicated formulas to adjust for percentage of fair market value, so when a township reassesses and the total assessment say, doubles, there isn't necessarily a doubling of the school tax for owners in that township.

A reassessment will result in increased taxes for some, but not necesssarily all, homeowners, and will create some hardship. I've often thought that there should be some system where homeowners on fixed incomes or otherwise unable to pay a higher tax bill should be able to have a lien placed on their house for a portion of their taxes so when they sell their house (and benefit from the appreciation that resulted in those higher taxes) the township can get paid, but the homeowner can remain in the house.

A question I get often from buyers is whether the assessment on a house they're buying will rise to market value upon sale. The general answer to that is 'no', for reasons that are related to the principal in New York that houses that are comparable in a township must be assessed equally. But I do warn them that if a house has a particularly low assessment (and low tax bill), they should be prepared over time for the property taxes to rise into a normalized range, which for most townships in Sullivan County is about 1.8% to 2.2% of the property's actual market value. (The big exception to this is the Village of Liberty, with a much higher effective tax rate.) If you have an effective tax rate of 1% of market value, you should probably expect your taxes to rise, and if you have a much higher rate than that range, you could possibly have grounds for a grievance.

In many ways, doing a township-wide reassessment is a good thing to do. It brings fairness to the system. But its also excruciating, and not perfect. It will likely take a year or two for values to really equalize. The grievance process is particularly important to the assessors, because it provides them with a lot of information that, along with additional sales, helkps them fine tune the assessments. It is far from an easy process, and doesn't win the assessors any new friends. But ultimately its critical to insuring the fairness of the system.

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Update on this thread May 29, 2008: If you're coming to this thread for the first time, the comments below may not make a lot of sense. This thread got totally out of control, with personal attacks. More troubling, though, is that some commenters impersonated other commenters (by using a signature just slightly different than another commenter). I've removed a number of comments on here, but tried to leave the general tone of the thread intact.

Comments

[PNJ]

Are taxes paid yearly in Sullivan or quarterly?

[robert]

Townships are having dramatic budgetary shortfalls. Ms. King was given a directive and she followed it. The rest is history. Good luck on your lawsuits.

The county is preying on those enclaves that have money.

[Dr.Edwards]

Please explain the tax formulation for the following property:

http://www.sullivancountyrealestate.com/rm/listings/l0279.shtml

Thank You.

[David Knudsen]

Chuck, I beg to differ than I'm entirely wrong. The tax assessor is responsible for setting the tax roll, the total assessed value of the property in the township. The town board is responsible for setting the budget, which is divded by the tax roll to arrive at the levy. The problem comes in with the county portion of the taxes, and how the school districts levy for property in different twonships, some that have assessed at full value and done a reassessment and others that haven't. I agree with you that owners should grieve so they have some legal standing. Did anyone here go to the township meeting last evening? What happened? Did Highland bring in an outside company to do the township-wide reassessment?

[David Knudsen]

From the horse's mouth, the NY Office of Real Property, about how the assessment and levy system works:

http://www.orps.state.ny.us/pamphlet/taxworks.htm

[David Knudsen]

Dr.Edwards, on that property you referenced --- a non-lakefront lot at Chapin Estate --- ths issue is that the listing agent put in the taxes wrong. Looking in an online tax system, its clear that the school taxes weren't paid on time and were added into the property (county/town) tax bill, in what's called a relevy. The total taxes on that lot are about $2000 less than what the listing agent has posted.

[James Dean]

"Chuck" from Catskill Farms writes:

'DK - great thread,unfortunately entirely incorrect. Since Highland is at 100% equilization, every dollar hike in assessment is an increase in taxes.

Very simple math in Highland - assessment x 3% (.03) = tax bill. If your assessment went up $100k, then your taxes went up $3000.'
*************************

Hey! Isn't Catskill Farms selling houses in the Town of Highland in Sullivan County?

jd

[Nest Dweller]

Glad I checked in here... our weekend place is in Highland and we've received not a shred of information from the town about a reassessment. And, of course, there's no answer at Town Hall.

FYI Chuck: the number you list above, (845) 557-6065, is out of service.

Last year we had to battle the town to adjust our assessment... they had us listed as having a garage (we don't), having 1770 square feet (we have 1400) and even had photos of the WRONG HOUSE in our files.

[Nest Dweller]

UPDATE: Spoke to someone at Town Hall in Highland... our assessment has jumped by 52%!!! Dunno about you, but I smell a lawsuit a'comin.

[PNJ]

More Reason not to buy anything in Sullivan County!!

[Reg]

Taxes go up. It happens. It should.

Because the township is paying more for its services, so should residents. It's that simple. Whine all you want, sue all you want, but time and again, courts have found in favor of municipalities over residents in tax increase lawsuits. If your assessment is based on the wrong information, then clearly you have every reason to complain, but as long as you're being assessed at the same rate as your neighbors in the same township, you should just deal with it.

[R.W. Emerson]

...and then again we read in The New York Times today-

http://www.nytimes.com/2008/05/17/us/17texas.html?pagewanted=2&_r=1&hp

Paging Charles P. - and comments?

Your obdient servant,
R.W. Emerson

[Nest Dweller]

Reg: Absolutely, taxes do need to rise over time. But by 52% in one year? C'mon.

Let me add that our taxes haven't been exactly stagnant since our place was completed in 2005. They've gone from $2209 in 2005, to $5144 in 2006, to $6400 in 2007, to an estimated $9724 for 2008. (Yes, David says this won't be the case, but I'll believe it when I see it.)

$9724 for a 1400 square foot house? Again I say c'mon.

And as far as services go, as part time residents we benefit from very few of them. I get far more services here in the city where I live full time; my house here is nearly the same size and my taxes are half what there are in Highland.

Deal with it? Sorry, I'll never "deal" with being hosed.

[PNJ]

Our home is assessed for $957,000 in Queens County, NY and we pay $3800 after star (4200 without star), plus bloomberg sends out 400 bucks rebate every year, so $3400 for a house worth almost a million. Keep in mind that NYC Finance dept. undervalues every assessment by 15% so the home is actually worth over a million....only 3400 in taxes!!
Even Long Island and Westchester have better taxe rates than Sullivan County with the best of the best in schools and lifestyle.
Why on earth would anyone pay $8500 in taxes for a bungalow worth only 300k in sullivan county?
There is some serious small-town corruption in Sullivan County. Notice how the locals pay much less than when the tax bill is mailed out to a non-sullivan primary address? Attorney General Cuomo should look into this.

[Michael]

Wayne is practically the same as Sullivan distance wise...I live in Damascus, which is just over the river from Cochecton, so essentially exactly as far away from NYC. Beach Lake area is also a good spot, quite close to Narrowsburg. I think of this as one area, but tax wise, we are certainly not burdened anywhere near as much. If one has over 10 acres and enters their property in clean and green, most tax bills stay between the $1000 and $2000 mark.

This is a listing I love...I think all could agree a not to shabby property, 45 acres and an outstanding restored farm house with an artist studio in the restored barn, etc, the works...1.25 million asking with taxes of $3,800. http://www.fredarealty.com/realestate/index.asp?ListingLocationID=&ListingCategoryID=4&ListingID=217

(I figured that was okay since it was a compliment to the property, but feel free to delete Dave if this goes against the specific properties thing.)

I think you hit the nail on the head with your point that high predictable taxes is much different than a 52% rise in one year...that's totally unacceptable and hopefully y'all will fight it to the end. It's not like anyone is Sullivan is getting superior services for all that dough anyway.

[David Knudsen]

This thread sure provoked a lot of response, more response than anything else I've posted on this blog. Clearly the property tax situation is frustrating. Its also clear as mud. I've been selling real estate here for 8 years now, and I can't definitively answer a simple question like "Will my assessment go up when I buy a house." In Florida, where I had a second home, you know you're going to get screwed (particularly as a non-primary home owner), but at least you know exactly how it happens. In the county I was in (Volusia) everything that wasn't homesteaded was reassessed every year and set to market value, and when you bought property that had a low assessment due to the homestead exemption, you knew it was coming up to market value the next year. The Florida system ultimately is incredibly inequitable, shifting an increasing tax burden to new residents and second home owners. But at least you knew how it worked.

I don't agree with PNJ that the system here is corrupt, its just horribly broken. But New York politicians, from the governor on down, have no spine to fix it. WE have one of the most ineffective state legislatures in the country. Ultimately, lower taxes will require consolidation at the township and school district level, as well as digging into the mandates and directives that are so expensive to fund. I just don't see that happening in my lifetime in New York.

[Reg]

Sorry, Nest Dweller, but it makes no difference whether you're a part-time resident or a full-time resident--everyone pays into the tax system at the same rate, which keeps costs lower for everyone. Your taxes are lower in the city because there are more people across whom the same minimum costs of services can be spread out. You shouldn't be exempt from paying into the system just because you opt to spend time elsewhere during part of the year.

If you want a pay-as-you-go system, you might as well privatize the whole thing. And boy, that system has worked brilliantly in places like India.

As for your tax increases, I hear you that you've had increases since 2005. Might not be idea, but perhaps the 05 assessment was substantially too low. From your perspective, I'm sure you won't agree, but from an assessor's point of view, it's better to step the increases.

[Nest Dweller]

Reg: I didn't say that I shouldn't pay less because I'm a part-timer... I was just saying that we - meaning ALL residents of Highland - don't see a lot of services for the amount we're paying into the system.

I also said that increases are to be expected. Our 2005 to 2006 jump was explainable: we went from building to a complete home. Even the increases thereafter have been somewhat justified... but this latest round is not.

We contested our 2007 reassessment because we found that the assessor had SOMEONE ELSE'S HOUSE in our file. (This means we overpaid in 2006, but, of course, there was no way we'll ever see a rebate, even though the mistake was clearly not ours.) The assessor made a correction and gave us a new assessment that was supposed to have been a fair 100% of the market value of our house. Fine.

Now they are reassessing again, and that fair assessment has jumped by 52%, even though the market is down. WAY down. If anything, I'd say the market value of our house has dropped... yet, somehow, the assessor feels the worth of our place has skyrocketed, and in a declining market no less.

This doesn't make sense and I defy you to tell me how it's justified. I'm not saying I shouldn't pay taxes, nor am I saying that I should be cut some sort of break. I'm saying there needs to be a sense of fairness. I'm also saying that I feel the assessor is taking advantage of us.

Even if the grand list goes way up and our tax rate goes down accordingly, I have a problem with the town saying my house is worth way more than it is. And that's a legitimate gripe, no?

[HabuViper]

Here is the Assessor's Email for Lorry King. Mine assessment is up 50% this year after %23 last year on a full assessment.

highlandassessors@hvc.rr.com

Phone# but it rings forever as if unpluged 845-557-6563

[HabuViper]

http://www.orps.state.ny.us/press/sullivan_pr07.pdf

Assessor must be doing something right as they got an award...