The good news is the value of your property may have increased. The bad news is the tax man is coming to collect more taxes. Many of us received our notice of reassessed value in the mail this week. More than a third of properties in St. Louis City saw an increase. The Central West End, South Grand and Tower Grove showed the larger city increases. In St. Louis County, the median change in property value was up 7.3% with Webster Groves, Lindbergh and Kirkwood school districts leading the gains, according to the County Assessor’s office. And St. Charles County increased nearly 5%.
This year’s reassessment is larger than recent years. While this is good for our personal balance sheets, it likely means our taxes will go up. Our property taxes are a function of two things, the assessment and the rate. The assessment is sent to us in May, the rate is not published until Fall. We will not know our 2017 property taxes until November. If you are selling your home today, the amount you owe at closing will be based on 2016 taxes.
The Assessor’s job is to establish the fair market value of your property every odd dated year. Market value is the price the property would bring in an “arm’s length transaction” on the open market (i.e. not foreclosure or a private/family sale). The Assessor may use a Cost Approach, the value of land plus amount it would take to replace the structure, a Market (sales comparison) Approach, an estimate based on sales of comparable homes or an Income Approach, for commercial properties.
In my world of residential real estate, the Market Approach is used most frequently. Your assessed value is estimated from sales of comparable homes in your neighborhood or close proximity. The comparable sales need to be before January 1, 2017.
When you receive the reassessed value, think to yourself “Is this the value for which I would sell my house?” If you believe your assessed value is too high, there is an appeal process; you can schedule an optional informal conference to review your information. If not satisfied with the informal meeting or choose to bypass the informal meeting, you may appeal to the Board of Equalization. For information, you may call:
St. Louis City: (314) 589-6581
St. Louis County: (314) 615-7195
St. Charles County: (636) 949-7560
If you do choose to appeal your assessment, here is a list of suggested items to bring, copied from St. Louis Assessor’s office (https://www.stlouis-mo.gov/government/departments/assessor/frequently-asked-questions)
1. Appraisal – By one of the independent St. Louis appraisers, that reflects the market conditions as of January 1 of the most recent reassessment year.
2. Sales Contract – That reflects an “arm’s length” transaction on the open market. (An “arm’s length” transaction is a sales agreement between two individuals who have previously never met. A non-arm’s length transaction would be the same as a parent selling their child a property at a discount.)
3. Closing Statement – That reflects an “arm’s length” transaction on the open market.
4. Photos – That show the existing structural issues or conditions that a buyer may require a seller to repair prior to closing, or that might affect the market value beyond what the Assessor has already taken into account.
5. Repair Estimates – That shows structural issues or conditions that might affect the market value of the house.
6. Statement of Construction Costs – That reflects recent bills or statements that demonstrate the value of new construction or additions.
7. Comparable Sales – Sales of similar houses in the same or comparable neighborhood that occurred before January 1 of the most recent reassessment year; information is available on the County website.
You may not need all of these depending on your case.
Janet Horlacher
Principal, Janet McAfee Real Estate