Your real property taxes are impacted by two things: your assessment and the tax rate. While you cannot control the tax rate, you can contest your assessment.
Your property should not be assessed above its market value. You can also review comparable properties to see if your assessment is unequal in comparison.
Not all municipalities use 100% valuation, so the full market value must be determined in relation to the equalization rate for the municipality. The assessed value, equalization rate and full market value of the property are shown on your tax bills.
The First Step—Are you Over Assessed?
Determine whether your property assessment is too high or unequal in comparison to other similar properties.
Helpful information to determine market value includes a recent appraisal, a recent sales figure, listing, or broker’s opinion of value. You do not want to draw attention to your assessment if you are under assessed.
Commercial properties are most often valued based upon the income approach, which is determined by analyzing market rent and typical expenses and applying a market capitalization rate. An appraiser can provide you with an initial analysis of the property after review of your income and expenses, rent roll, and other pertinent information. The market approach (sales comparison) is another valuating technique used in appraising commercial real estate.
Residential properties are valued by reviewing recent sales of comparable properties.
The Second Step—Meet with the Assessor
Speak with the Assessor about why you believe your property is over assessed. An attorney or appraiser can help prepare you for meeting with the Assessor or can attend on your behalf.
When? The best time is prior to the Assessor’s submission of the tentative tax roll, because the assessment can be reduced without the filing of any paperwork. In Dutchess County, the tentative tax roll issues on May 1 of each year, and the Assessor must submit the tentative roll to New York State by early to mid-April.
The Third Step—File a Grievance Complaint by the Deadline
If the tentative tax roll is already out or the Assessor will not reduce the assessment, you must file a grievance complaint with the Board of Assessment Review. In most municipalities, grievance day is the 4th Tuesday in May. If you miss the grievance deadline, you will have to wait another year before you can contest your property tax assessment.
Some villages have their own tax roll separate from the town. In that case, a grievance must be filed within the village, and dates for filing vary among villages.
The Fourth Step—File a Court Proceeding by the Deadline
It is common for the Board of Assessment Review to deny the grievance complaint.
If the grievance is denied, or the assessment is not reduced enough, a court petition must be filed. In Dutchess County, the deadline to file a petition is July 31. If the petition deadline is missed, you lose all rights to contest your assessment for that year.
If the property is a 1, 2 or 3 family owner occupied dwelling, you can file a Small Claims Assessment Review (SCAR) Petition. It is designed to be an alternative for formal Tax Certiorari proceedings and provides for review for a filing fee of $30.00 before a SCAR Hearing Officer.
If it is a commercial property, a Tax Certiorari petition must be filed by an attorney in Supreme Court. While your case is pending, you should pay your real property tax bills, because interest and penalties accrue on unpaid taxes. You will receive a refund once the case has concluded.
Other Property Tax Savings Options to Explore
There are other avenues to pursue real property tax relief. Be sure you have researched any potentially applicable exemptions, including but not limited to business investment, charitable and agricultural exemptions.
In Dutchess County, exemption applications are due on or before March 1 of each year. Certain exemptions require renewal applications by March 1 of each year.
Annually Review Your Assessment
It is important to know your property assessment and see if it changes from year to year. Many towns and cities annually adjust their tax roll to keep it at 100% of valuation. During the COVID-19 pandemic, the local real estate market has experienced a boom which is likely temporary but may very well result in an increase in your assessment.
You can review your property tax assessment on your tax bills. In Dutchess County, a great resource is Dutchess County Parcel Access, which enables you to review your property card and those of similar comparable properties.
Stenger, Diamond & Glass, LLP is a full-service law firm with offices in Wappingers Falls, Poughkeepsie and Kingston. For more information on SDG Law, our services, and our attorneys, contact us or call us at 845-298-2000.