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Tax Assessment vs. Listing Price


By and

The Camera recently has made an issue of the difference between the County Assessor’s valuation of our house ($835,000) and the listing price ($2.1 million). We bought the home in which we live at 1680 Wilson Court in 1988. The assertion made in the articles is that we have a duty to pay taxes based on the asking price rather than the assessed value. We asked the Camera to publish our side of the story alongside theirs; but they declined to do so in the print version of the most recent article.

The two Camera articles were prompted by ReMax realtor Brian Barrett and CU employee-blogger Mark Gelband, both of whom are furious about the Compatible Development ordinance, on which Macon took a leading role. Heath Urie, the Daily Camera city reporter, always plays to his base—which is a group of bloggers that create a sustained howl. Nearly all of the bloggers are anonymous, so they aren’t accountable for anything that they say. They asserted that work must have been done at our house without City permits, that we received a low assessment because Macon is an elected official, that there are unpaid taxes on our house. Each of those assertions is false. We have done no work at our house without receiving the required permits from the City. We have received no treatment from the Assessor’s office different than anyone else. And all taxes on the house have been paid.

Most property owners in Boulder know that there is a difference between an asking price and the assessor’s valuation. The tightest correlation between the two is when there has been a recent sale of the property that establishes a market value. It is not at all uncommon for there to be a considerable difference between the assessed value and the selling price of real estate—and this is particularly true for properties that have not been sold for a generation.

The State and the County have a process that is laid out in state statutes as to how real estate is to be valued. Our home has been assessed and reassessed ten times since we purchased it in 1988. It is the responsibility of the County Assessor’s office to follow that procedure and to value property correctly. It is the right of every property owner to appeal the assessment if they think that it is too high.

Last year, we exercised that right through a public process that is available to all homeowners after we received an assessment from the County Assessor that increased our home’s value by 31% over a period (2007-2008) when property values in Boulder were flat. The means we used for obtaining a re-assessment were through the County Assessor’s web based-appeal process.  In appealing the assessment, Macon stated the reasons for a lower assessment as follows:

“The Assessor has increase [sic] the assessed value of my home by 31% during the time between 2006 and 2008. This is simply not credible. I ask that you please establish the increase in assessed value at a more realistic level, such as 3-4%. Thank you.”

The appeal brings the property specifically to the attention of the Assessor, giving the County and State a second, independent opportunity to recalculate a previous assessment. The tax apparatus of the state can then increase, decrease or leave unchanged a home’s value using all market and other data that the Assessor deems pertinent to its decision, taking into account the reasons for a lower assessment offered by the taxpayer and any other relevant data.

In our case, the appeal process, over which we had no influence, resulted in our taxes being increased the next year by 37.5%, and an assessed value of nearly three times the amount we originally paid.  Further, the Assessor’s data provided to the Daily Camera on September 3 show that the assessed value of our house is in fact higher than all but two other properties on our street. And those two properties assessed at higher values were recently gutted and rebuilt.

In summary, our property has been assessed according to the methodology and appeal procedures that are available to the Assessor and every taxpayer. We recognize that taxes are an important part of providing public goods, including schools, transportation and human services. But we also believe that a taxpayer’s right to challenge assessments is very important. It is a right we share with every property owner in the state, and one that we have exercised appropriately.

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3 Responses to “Tax Assessment vs. Listing Price”

  1. ejohnson says:

    I certainly noticed the difference in assessed & market value on my Boulder condominium. And, I’ll gladly point out that I didn’t take the issue up with the Assessor’s Office in an attempt to increase the assessed value, and ultimately my property taxes. Who would?

    How many Boulderites have done exactly the same thing upon seeing the difference? I’d venture to guess that tens of thousands have.

    And surely hundreds have filed with Assessor for review of an increase in assessed value. The problem with Macon and Regina Cowles exercising their rights is … what exactly?

    If they leaned on the Assessor’s Office for favorable treatment, that’d be a different matter. But, to date, I have seen no coverage that indicates, or even reasonably suspects, that this took place.

    — Eric Johnson
    Lafayette

  2. Michael Reid says:

    I don’t find the Cowles’s arguments very persuasive.

    Having appealed my own assessment in the past, I know all too well that there are only two grounds for appeal:

    (1) Your property was incorrectly described by the assessor (square footage, number of BRs, etc.)

    (2) You believe, and can demonstrate with data, that the assessor’s *estimated market value* of your property is too high.

    These criteria are clearly stated on the assessor’s site: http://www.bouldercounty.org/assessor/appeals/index.html#Whatisanasse

    Note that pointing to assessed values in your neighborhood does not carry any weight unless those homes are considered comparable and have sold in the previous two years. (Trust me, I tried that approach in a prior assessment cycle through two levels of appeals.)

    The fact that the Cowles’s assessment increased 31% in a slow market mostly suggests that the property was previously undervalued by the assessor.

    More to the point, did Mr. and Ms. Cowles honestly think that the *market value* of their house at the time of the assessment was a mere ~$700,000? I find that hard to believe. If that indeed were the case, it is still disappointing, as it demonstrates a surprising lack of knowledge of Boulder economics that is not becoming in community leaders.

  3. Let’s take another example from publicly available data.

    Looking at 411 Concord Street, Boulder, CO

    Property Assessment: 9/6/1988 $136,000
    Property Assessment: 6/1/2006 $674,000

    Zillow shows it was listed for sale on 3/28/2008 after extensive remodeling for $1,699,000. The property did not sell for over a year and was eventually re-listed for $999,999 and it still did not sell for two more months when it finally sold for $950,000

    The Asssessor’s office now lists the property assessed value as $1,159,000 even though it only sold for $950,000. They list the land as $506,000 and the house for $653,500.

    Does that seem fair to you? It clearly wasn’t worth $1.7 million but why $1.1 million when it just sold for $950,000? Comparing the $1.7 million price tag that was once on the house to the last assessed value of $674,000 means they were under assessed by about $300,000.

    Property assessments and asking prices are arbitrary.

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