I’ve looked in to things like HELOCs before, and from what I know when you’re looking for something like that or some sort of loan that needs some underlying collateral banks usually use appraisers to determine the value of something you’re taking a loan out against. Do people who commit fraud somehow just say “Yup, my properties are worth $X,XXX,XXX” and the banks just gave him loans based on their words? During any of these processes do appraisers get involved? How can you get loans by just saying “My property is worth this much” Do people alter the financial records of how much income properties are making so banks assume buildings are worth that much? Don’t things like the physical characteristics / condition of a building itself, and the location, and similar comps mostly dictate the price tag of real estate?
In: 26
Assuming this is in reference to Trump, in my state, the county assessor in the biggest city (Chicago) can’t possibly assess all the buildings. The county claims about 1.8 million properties, which are assessed every two years, although other sources think it’s closer to 4 million. About 30 property tax assessors (some of whom are managers or accountants who don’t actually assess properties) are responsible for assessing those 1.8 million properties every two years, or 900,000 properties per year. If we accept 1.8 million properties, and 25 of those employees did nothing but assess, they’d have to assess 36,000 properties each/year, or nearly 20 properties/day, top to bottom.
The truth is that those properties are all wrapped up in bulk assessments that hand out bulk tax rates, based on a bunch of assumptions about neighborhood, occupancy, building age, etc.
So you get handed a high standard tax rate (Illinois has relatively high property taxes generally), and you immediately hire a lawyer to appeal. CONVENIENTLY FOR YOU, a bunch of members of the state General Assembly also own lawfirms or are partners in firms that do literally nothing but appeal property tax assessments. They appeal — like everyone who knows how to file the form appeals! Property taxes are too high! — and they get you a cheaper tax bill. You pay them a percentage of the savings on your bill. And nobody says you have to vote for them next year, but you vote for them next year anyway.
Maybe in a few years, you own a really big property, and you hire the same guys to do your property tax appeal, and the difference in taxes is a few million after they get your parcel reassessed. And now they start telling you that only their friends get good, low assessments. And a little money changes handles to make everyone feel comfortable with the assessment. And suddenly you’ve paid a bribe, but it’s saved you $30,000, so it doesn’t feel so bad.
Anyway, the smart way to do property-related fraud in my state is to hire a politically-connected lawfirm and have your property assessed as “very dumb and very worthless” so you are taxed accordingly. Your lawyer can navigate the law and your valuation, and chances are the assessor doesn’t have the manpower.
(Also our last few assessors have been HELLA corrupt themselves, so you could also just direct-bribe them, although that’s a lot more federal prison for you if you do a bad job.)
Latest Answers