Your Home and its Value

  1. Most states require that your home be taxed at its fair market value. What is the definition of market value? Stated simply, market value is the price for which your home would sell in a fair and open sale. That means a sale where the property is offered on the open market under typical conditions, and not a distressed sale (i.e., foreclosure or forced sale). This is also often referred as an "arm's-length sale."
  2. While there are three primary ways that appraisers value property, for residential real estate the “Sales Comparison" approach is the most preferred. In this approach, the selling price of comparable homes is used to establish the value of the appraised home.
  3. Items that are movable are typically not considered to be part of real estate if they are not permanently installed or attached to the land or building. Such items are typically considered to be personal property, and not subject to the real estate tax.
  4. The most common architectural styles for US single family homes are: 1) Cape Cod, 2) Colonial, 3) Georgian, 4) Tudor, 5) Victorian, 6) Mission, 7) Bungalow, 8) Row House, 9) California Ranch, 10) Contemporary and 11) Post Modern
  5. The most common house designs include one-story, one and one-half story, two story, bi-level, and split-level houses.
  6. The most common roof designs include flat/low slope, gable, gambrel, hip, shed, salt box, shed dormer and mansard.

What states have the highest potential savings on property taxes?

Since property taxes are assessed on a local level, the potential for savings will be determined by how accurate the assessments are in each locality (town, city or county). That can vary from one area to the next, even within the same state. However, published reports have indicated that the following states have the highest property taxes:

  • New Jersey
  • New Hampshire
  • Connecticut
  • New York
  • Massachusetts

Tax Abatements Benefits Over Long Term

You may be surprised to learn that roughly 70% of Americans own their own home. For many people, home ownership is their financial cornerstone and most important asset. Homeowners tend to stay put. One study found that the typical first time homeowner’s length of ownership ranges from 10 - 16 years, depending upon ethnicity. Moreover, 20 - 30 year mortgages are commonplace. Thus, most homeowners will potentially own a home for many years, and will pay property taxes on that home each year of ownership. The savings associated with good property tax management over time can be very significant during the length of home ownership. An abatement can be a few hundred or a few thousand dollars, depending on the size of the tax bill, and the merits of the case. But even an abatement of a few hundred dollars every few years can provide a tidy return on investment for the cost of the Guide.