Today, I represented a member of SUN at a hearing before the city’s Board of Assessment Review. We challenged how the city assesses the value of our member’s home–and thus the amount of property tax she pays. I’m fairly confident that my arguments will result in a lower tax bill when she receives the decision in April. Every thousand dollars of assessed value we knock off will result in about $40 of savings, and we asked to reduce the assessed value by $11,000–a savings of $440 this year alone (more if they raise the tax rate in future years.)
SUN used to do scores of these hearings. In our history, we’ve probably done more than 2,000 challenges–with a very high rate of success in reducing the owner’s taxes. Today’s case will be the only one we handle this year.
Over the years, the city of Syracuse had allowed its assessment system to become a biased and unworkable system. Few owners understood how the city determined a home’s value. Taxes were calculated by using a number representing a fraction of the houses’ value and then multiplied by a large tax rate. Unfair assessments were the rule, with homeowners in affluent neighborhoods like Sedgwick and Strathmore paying less in property taxes than residents of adjoining low income neighborhoods.
In 1994, after a ten year battle, SUN convinced the city to reassess all properties in the city of Syracuse. The resulting assessment was reported in a way the homeowner could understand–a home’s assessed value was determined by its conventional market value. Taxes are determined by the full assessed value, homeowners currently pay $40 for each thousand dollars of assessed value.
Since reassessment and the subsequent shaking out of unfair assessments, SUN helps fewer and fewer folks file grievances. Many folks in our neighborhood believe that their homes are overassessed, but the problem isn’t bias, it is the collapse of the standard real estate market in the low income neighborhoods of the city.
To determine the market value of a home, you use comparable sales figures–homes of similar size, construction, age and location that have recently been sold. Unfortunately, the state disallows sales that are not what it calls arm’s length transactions: a buyer and seller freely negotiating a selling price. This means estate sales, auctions, foreclosures and sales between family members are not allowed to be used in calculations. This works fine in Sedgwick and Strathmore; but on the south and near-west sides of the city very few sales are arm’s length transactions.
I am forced to explain to homeowners that it is almost impossible to reduce the assessed value on a typical single family home on the Southside below $35,000, even though most sales in his neighborhood average about $20,000.
The whole tax game is sort of like casino gambling–the house is always going to win. We may be able to get a few mistaken assessments corrected, but even if we were successful in challenging the notion of what is and what is not an arm’s length transaction, the city will just increase its tax rate per thousand dollars of assessed value to make up the difference. The city needs a certain amount of revenue and it will take it wherever it can get it. I’m reminded of the Beatles song :
“Should five per cent appear too small,
Be thankful I don’t take it all,
‘Cos I’m the Taxman.”