Confused about Tax Assessed Value when Price numbers work

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1

I’m looking at a park where all the numbers look good and seller and I are in same ballpark using Frank’s equation for buy/sell price. That price is 1.2 million. However, I honestly do not understand why tax assessed value is only $300,000. It’s a large park across from a school in a big town. Also 20 years ago it sold for $600,000 land and $180,000 homes. A deal I was looking at a month ago had the tax assessed value very close to purchase price. I’ll be attending boot camp in November. Thank you.

2

Are there POHs included in the purchase.

3

There are two older homes that I’d want to sell off right away. All others are tenant owned with strong collections.

4

Market value is what it is worth, the assessed value is a percentage of that which is used for RE tax calculations. IF the tax assessor charged RE taxes based upon market value, most likely every where there would be demonstrations at their offices.

What you need to concern yourself with is the market value the tax assessor has placed on the property especially from a historical perspective. Along with the current market value as it is most likely way off.

If you read the news, recently in Georgia the state raised most market and appraised values by almost double IN ONE YEAR!

5

You need to call up the tax assessor and get them to explain the process to you. Without knowing what county you are talking about, no one would be able to answer this question. We are looking at a similar park and the county cuts the market value in half to find the taxable value. So, our $900,000 purchase price will have a $450,000 taxable value. This will then be the amount that is subject to the tax rate.

As for GA, most counties cut their market values by more than half as a tax relief for their housing crises. My taxes went from $1,200 a year to $300 a year almost overnight. The Atlanta market has almost fully recovered so it only makes sense that most counties are doing away with the relief.

6

Thanks everyone. I will call the assessor back and have him explain further. You have all been helpful.