Quick Reassessment After Closing?
Hello everyone? This question may differ from state to state but just wanted to throw it out there for feedback/discussion.
I was reading one of my REI books over the weekend and the author mentioned that you want to note when analyzing properties that the tax assessment can change soon after you closed the property.
This concerns me because say the previous owner owned the property for 20 years. Now you bought it and it will be reassessed which will significantly increase the actual taxes from the reported taxes. This will also affect your previous property analysis and potentially alter a cash flow property into a non-cash flow property.
Has this happended to anyone? If so, which state?
Thanks.
If the assessor sees the property sold for more then the assessment, they will generally increase the tax assessment to take in to account the change in market value. Many tax jurisdictions assess property tax based on FMV unless there are laws on the books to limit increase (ie. CA), however often reassessment can take place once the property changes hands. Check with the county assessor on the rules before you make a purchase offer so you can take changes in property taxes into account.
Thanks everyone for the guidance!