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Thursday, July 05, 2007

Property tax assessment disputes on the rise in Ramsey County

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posted by Bob at Thursday, July 05, 2007

3 Comments:

Blogger Bob said...

With the residential real estate market slumping, questions and challenges over 2007 tax assessments have more than doubled in Ramsey County over last year, and queries have risen significantly in Hennepin County.

By Pat Doyle, Star Tribune

Last update: July 01, 2007 – 9:53 PM

With the residential real estate market slumping, questions and challenges over 2007 tax assessments have more than doubled in Ramsey County over last year, and queries have risen significantly in Hennepin County.
When the housing market was hot, homeowners reaped the benefits of rising property values -- and paid higher taxes for it. Now that the market has cooled, some homeowners are expecting a break in taxes and seeking an explanation when they don't get it.

This spring, Ramsey County fielded 998 inquiries about residential valuations, compared with 470 in 2006. In Hennepin County, queries about the suburban assessments increased 32 percent.

"One of the reasons we had ... more appeals this year is folks saw their market value stagnate or perhaps even decline a little bit, but their taxable value continued to increase," said Ramsey County Assessor Stephen Baker.

That phenomenon is the flip side of a state system that worked to homeowners' advantage during boom times by limiting the growth in the value on which they are taxed.

But the same system means taxable value can still rise in a sluggish market.

Another factor contributing to the second-guessing is that the annual property value statement sent to homeowners in March may reflect estimates from a year ago, when the market was more robust.

"When the markets are going up, most taxpayers are perfectly comfortable with the assessor lagging behind a bit," Baker said. "But when the market starts to contract, they're much less happy with that."

When Jay Theriault got his tax statement and saw what Ramsey County said his home was worth, he did a double-take at numbers that looked too high.

"I said to them, 'If you want to bring me a check for that amount, I'll be out within the end of the week,' " Theriault recalled.

Theriault and his wife, Ruth Hjelmgren, both real estate agents, thought the assessment of their St. Paul home didn't jibe with their sense of a slumping housing market in their area. They appealed to the county and it sent an assessor out to evaluate their home. The county revised its estimate.

"The number they came back with was pretty much on the nose," Theriault said.

Some win, some lose

Overall, the March 2007 statements -- for taxes payable next year -- showed residential market values flat in the state's two most populous counties. Single-family homes in Ramsey County declined less than two-tenths of one percent when improvements were not included. Hennepin County saw total residential property values increase 4 percent. Unimproved single-family homes in Minneapolis increased 1 percent in value.

Those figures contrast with the boom of the early part of this decade. Even tax statements that went out in Hennepin County last year showed an 8 percent increase in home values.

Like Theriault and his wife, other property owners who believed the official valuation of their homes was out of sync with a changing market have asked county assessors to take another look.

But not all of them win.

Ananth Pai challenged the $217,300 market value assigned to his Maplewood home. He took his concerns to Ramsey County officials at an assessment review meeting in Roseville.

Pai said he had a "perceived reality" that houses aren't selling at the pace of a year or two ago, "and that must mean that property values are going down or should go down."

Pai said he worried that improvements made in neighbors' property unduly influenced the county's assessment of his.

"I wanted to know that it wasn't based just on some averaging of a database," Pai said. "I asked them if they would consider taking a look at the place just to make absolutely sure."

He said an assessor came out to his house within a week of the Roseville meeting and inspected his property. He got a letter soon after saying the county wasn't changing its mind.

"Overall it was fair," Pai said of the appeals process. "I'm satisfied that somebody actually came out."

Delayed impact?

A survey of Minnesota counties by the state show that, overall, residential property values grew more slowly in 2006, although a few communities saw small dips.

For the most part, "we were getting smaller increases," said House legislative analyst Steve Hinze.

But Hinze said any softening in home market values this year won't be realized on tax statements until 2008, if then.

Any further diminishing of values this year that is not captured in next year's statements could become "what they may be complaining about next spring," he said.


Pat Doyle • 651-222-1210 • pdoyle@startribune.com

9:37 AM  
Anonymous Anonymous said...

The property tax system in Ramsey County is broken. Speaking from personal experience, I received a notice about the proposed value of my property a few years back. I went to the open book meeting in Roseville and they asked me if I had a current appraisal for my property. I produced one that was about 18 months old when I refinanced my house. I was told that this was not good enough. I asked them for their appraisal of my property and I was told that the county being so big it is not possible to do an individual appraisal for every property, but as the homeowner I had to have a current appraisal for the county to drop the property value. The county also said they would come out and reevaluate my property.

I received a letter from the county stating that the number they came up with was correct. I then took it to the board of appeals. The appraiser from the county produced a appraisal of my property that was out of this world. I had a new appraisal done and I also had several letters from local realitors supporting my appraisal. In the end the Board of Appeals dropped the value by only $1,000.00. At this point the County and I were still over $55,000.00 difference in value.

My next step was to file in Tax Court at a cost of $350.00. A date in tax court was assigned. A few days before the court date I get a call from the county indicating they were unprepared, they had over 8 months to get ready for the tax court date. I was ready to go to court with an attorney and appraiser for the hearing. The new date was set. Again, shortly before the new court date, I get a call from the county indicating the appraiser would be out of town and the court date needed to be changed. The court date again was changed.

Having heard nothing from the county I called the county and we set up a meeting to go over the appraisals before the court date. At this meeting the appraiser stated to me, “I do not see why your are contesting your property value? Are you trying to get out of paying your fair share?” The meeting did not go very well and as my appraiser tried to reason with the county, but they would not listen to an appraiser who had over 30 years of experience of appraising properties. We went to court and the judge reduced the value of my property by over $45,000.00. This was good news for me, but the parting shot from the appraiser from the county was, “You spent a ton of money for a new appraisal, you paid the court costs, what did it save you? If you would have just paid the tax it would have been less expensive than contesting your value. What did you gain?”

The next year after the court case, my property value was again assessed at a higher rate by the same appraiser from the county. Again, I went through the same process and the court determination was the same, they reduced the value of my property.

The appeal process is broken as only the wealthy can contest the value. The county has a lot of power and they do not like to be challenged. The little guy like myself can not fight this year after year. It is a game with some of these appraisers from the county.

10:56 AM  
Anonymous Anonymous said...

This is the way it is in general with government in Ramsey County and the city of St Paul. They just screw people over whenever they want knowing full well that most people do not have the money to fight them. What a bunch of slugs we have for leadership here!

1:27 PM  

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