Is new tax assessment automatic after sale?

Question

I’ve come across a multi family for sale that works for cash flow but it seems the taxes are on an assessment around half what it’s likely to sell for. I haven’t had the experience in buying a place with that much of a gap and I’m not remembering if I should expect taxes to immediately jump to the sale price level. This is western Massachusetts so it’s already pretty steep.

Additionally, Is there any way to do some homework to find out if it’s likely or automatic for this town?

Thanks

Additionally, Is there any way to do some homework to find out if it’s likely or automatic for this town?

Thanks

Patricia Steiner · Answer

There is a Tax Estimator feature on the property appraisers' websites. Key in the address and the price paid and it will give you a range for estimated taxes. The taxes listed on the MLS and other third party sites is the tax the current owner is paying; it will not be what you will pay which is based on the sale price and ownership (like primary or not).

Hope the deal works with the new assessment; and better to know now then after acquiring it...good for you for vetting this.

Best.

Hope the deal works with the new assessment; and better to know now then after acquiring it...good for you for vetting this.

Best.

Trevor Richardson · Answer

It’s really simple. Call/visit the county assessor.

Alecia Loveless · Answer

@Philip Watts It depends on where you live. In my area we don’t typically reassess when property is sold. Most towns in my area are on an assessing rotation and mine is every 4 years so I can expect my property to be reassessed every 4 years.

That being said our town can only raise enough taxes to fund the town budget which our local government strives very hard to keep about the same each year. Sometimes it has to go up of course, but usually it is fairly stable.

Taking that into consideration that unless you have added onto your property, a new deck, or an addition like a new bedroom or a pool or something your value may change some but usually not too significantly.

The mill rate then varies depending most of all on how much the school taxes are. Factoring all this in together our taxes don’t vary much more than $3-400 at most per year.

The taxes are the first determining factor I look at when I look at a property in my area because you could have a $200K house with $3500 in taxes or $7000 in taxes and it’s not likely to ever change and if it’s on that high end that’s money you’re throwing away every month from your cash flow and maybe you look for a lower taxed property here.

I understand it’s very different in other parts of the country.

Bob S. · Answer

Yes,

Colleen F. · Answer

@Philip Watts  probably depends on the town.  bought in Acton and next year went right up to above what I paid for it. Appealed to the town denied and would have had to go to the next level.

Zachary Ware · Answer

I would recommend getting in touch with the county tax accessor. Not only will they be able to provide you with a solid estimate, but they will also be able to guide you through what their process is and how you can estimate changes on future deals.

Caroline Gerardo · Answer

Since is an investment expect property taxes to increase to 1.13% of recent sales price anywhere from 4 -12  months. Assessor gets you usually before the next half cycle.

Lien Vuong · Answer

You can expect that it should be assessed around 75% of sale price roughly 12-18m after you close. There's some owner occupied incentives also for you if you live there which helps with the cost.

Is new tax assessment automatic after sale?

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