Country property taxes
The best investment you can make today is in taxes. They are sure to go up! A major concern in acquiring country property is the cost of all real estate and school taxes. Special tax assessments by local villages, towns and counties, in addition to the normal real estate and school taxes assessed in accordance with property value, must also be considered. Simply stated, “What are the taxes at present, and what may I expect them to be after purchase?”
Rehearse this question well before making your final decision. The answer usually will be ambiguous. Let me explain why. The system of taxing rural properties is as antiquated as the horse-drawn carriage. Property now being offered for sale that has been in the same family ownership for two or three generations or more reflects the value of many years ago. Tax rates generally have steadily increased, but assessments on this type of property have rarely changed. Local tax assessors living in the community are bound by many political and friendship ties. Sophisticated reassessment procedures performed by impartial experts have not been widely accepted by them, by reason of cost, and independent thinking.
The one-hundred-acre farm with buildings thereon might now be carrying an assessment based upon 40 percent of its present-day market value. You are informed that the total taxes for the current year are in the amount of five hundred dollars. Naturally, your first reaction is extremely favorable. If you liked the property before hearing this, you’re now in love with it. Local tax assessors are advised from various legal documents recorded at the time of sale as to exactly what you paid for the property. This current value now becomes the basis for a new assessment effective with the next taxable year. Your tax bill now might be double or triple the old amount and your blood pressure could rise accordingly. The hills begin to echo with the old refrain, “Why didn’t someone tell me about this before?”
Now that you have been forewarned, what is there to do about it? If the property you have purchased has changed hands within the past five years, cool it! It’s not likely there will be much change as the assessment will already reflect current value. But if you feel there will be reassessment and that the tax bite could be tremendous, the following procedure could be most rewarding.
Arrange an appointment with the chairman of the local board of assessors and his committee at their convenience. Advise this honorable body of your intention to purchase the Jones place, and of the amount you anticipate having to pay. Inform them that you have been advised of the present tax rate, and are satisfied with the obviously fair and equitable job they are doing. Let the board know that you and your family are anxious to become an integral part of the community. Further, request a reasonable estimate of what you may expect your real estate taxes to be, based upon the proposed purchase price, and let them understand that your decision to buy will be contingent upon their reply. This meeting will give you an indication of what to expect. The personal, human element involved is bound to be more favorable than leaving the process to a routine, mechanical evaluation. Don’t expect their estimate to be reduced to writing at that moment, as this is not done until their conclusions are formally entered into the books of record.
This procedure outlined might be undertaken by your local attorney, but it is suggested you consult him on this matter as to his opinion. Negotiations with the local board of assessors will be more favorable with you, or your attorney, depending upon the personalities involved.
Assuming you complete purchase, and then are not satisfied with the new tax bills, you may have recourse to the courts.
You should also inquire as to whether any major improvements are being planned within the local taxing authority area as these, too, can have a definite effect on your future taxes. Many states are now enacting legislation to eliminate inequities in assessments as well as antiquated methods of making them. The process of change in rural communities is slow. You will have to abide by country procedures, if you want to live in the country.