Assessment appeal not always good

February 5, 2011 

The green property-assessment cards have just arrived in the mail, showing the Municipality of Anchorage assessed value of your property. You have until Feb. 14 to appeal if you think the assessment is wrong.

But appealing might not be such a good idea, according to an article in the December issue of National Real Estate Investor magazine. This article, by Elliott B. Pollack, is written about commercial properties and does not generally apply to houses.

The article, "When Not to Challenge Your Tax Assessment," gives five reasons not to appeal.

The time and expense to assemble all the information for an appeal's hearing can be considerable and might be totally wasted on a poorly thought-out appeal. For example, a costly appraisal obtained for an appeal might actually support the tax assessment.

Here are several examples of when trying to decrease the value of your property might not be a good idea:

• The property is subject to an eminent-domain hearing.

• The owner is required to mark the value of their real estate to market.

• A prospective tenant might compare lease rates against property values to see which property is offering the best lease rate.

• Some loans have requirements for maintaining a certain loan-to-value ratio.

Winning an appeal might create animosity with public officials who might want to exact a price at some future time. I don't think this applies in Anchorage; at least, I certainly hope not.

The appeal might require the disclosure of proprietary information, and while the city will attempt to keep as much information as possible confidential, maintaining confidentiality is a risk.

The entire appeal process might be futile. Despite your time and expense, you might achieve only a slight adjustment, making your effort not worthwhile. Worse, although this rarely happens, in a tax appeal the municipality can seek a higher value when the owner wanted a lower assessment.

The author has a valid point. You need to carefully think through whether an appeal is really a good idea.

Go to http://www.muni.org/Departments/finance/property_appraisal/HowDoI/Pages/Appeals.aspx for complete information on the appeal process.


Chris Stephens, CCIM, is a local associate broker specializing in commercial and investment real estate. His opinion column appears every month in the Anchorage Daily News.

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