Every February the tax payer of record to a parcel of real estate receives a so-called “Change Notice”. Most property owners realize the importance of reviewing the Change Notice to determine if the State Equalized Value (SEV) of their property has been increased. However, it is also important to make sure that the assessor has not initiated a classification change.
For instance, recently we met with a sophisticated business client regarding the loss of a personal residence exemption (PRE). The Dept. of Treasury had revoked the PRE for the current year and three previous years, so the increase in his tax bill was quite noticeable. The property in question had historically qualified for the PRE and there was no change in the use or construction of the improvements.
Upon review of the tax records, we determined that the local assessor had visited the property and wrongly concluded that there was a business office housed within the larger improvements. The assessor changed the classification of the improvement from residential to commercial based on his erroneous observations. Our client did not catch the change in classification and therefore did not challenge the reclassification at the March Board of Review. On appeal to the Dept. of Treasury, we were able to recoup two years of the PRE but were barred from a full recovery because no challenge was timely made at Board of Review. An expensive lesson for sure. Please completely read your Change Notice and compare it to the previous year.
For all of your property tax questions call or email William L. Carey.