First Rental Home - Tax Appraised 90% more! Need to Protest.

[Robert K.]

Hello,

I recently got my first rental property in Jan 2012. My 90 year old uncle deeded the property to my LLC for free. I inherited a long term elderly tenant who has been in the home for 20+ years. She pays a very cheap $335/month. I chose not to raise the rent on her since she has very little income and has not missed a payment according to my uncle.

The taxes on the house (tax valued at $24K) for 2011 and 2010 were around $650. FYI, the highest this house has been taxed in the past 10 years was $33K in 2008 and 2009.

I just got the property taxes 2 weeks ago and the house is now being assessed at a tax value of $40K. That has increased the taxes to $1050.

I did get the roof replaced without coming out of pocket in February due to leaks for $3000. That is all that has changed in regards to the home. From my understandings of this particular counties appraisals process, they got and take photos from August 2011 - Dec 2011 to assess the tax value. With that being the case, I would think all actions taken from 2012 do not play a role in the the tax appraisal process. Am I wrong to make that assumption?

I've read up on the country tax appeal process and am ready to protest. I don't see how a home could go up almost 90%. I spoke to a friend and he thinks that since the see that an LLC now owns the home, they just jumped the taxes up. My plan is to get a realtor to look up the sales comps in the area and if that backs me up, use that to protest the taxes. Any other suggestions?

With the tenant only paying $335/month and taxes (and insurance) going up, I need the taxes reduced or she will have to sadly start paying more money. I'd like to prevent it via appeals if possible. All suggestions are appreciated.

Thanks!

[Account Closed]

This thread is interesting to me because in my market I find property taxes on low-rent properties to be disproportionately high, and appealing the assessed value isn't of much help. For example a property assessed at $40K with $1000 annual taxes, over $500 of that will be special assessments (this is a real example). Those are charges for trash, sewer, etc. that have come about in the last 10 or years. They are assigned to each lot, not per assessed value. So doesn't matter if your property is worth $5K, you'll still be paying the $500.00 for just the special assessments.

For those contemplating re-assessment, make sure you understand what your tax bill consists of and when/why your county is allowed to reassess. I say our time is better spent getting the right deal based on knowing the tax situation than trying to get reassessments.