Why do tax appraisers not appraise a property based off of its real-world valuation at the time of appraisal? Why is there such a huge disparity between tax appraisers and real-estate appraisers for sale?
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>ELI5: Why do tax appraisers not appraise a property based off of its real-world valuation at the time of appraisal? Why is there such a huge disparity between tax appraisers and real-estate appraisers for sale?
In my state, annual property tax increases can’t be higher than the rate of inflation unless a property is sold during the year.
I bought a house four years ago, and the property tax went up by about 50 percent compared to what the previous owner paid.
Four years later, my house is worth roughly double what it was when I purchased it. But my property taxes only go up by about 3 to 5 percent a year.
If my property tax was double what it was four years ago, I would have more difficulty paying the mortgage plus taxes. Someone who was barely making their mortgage + property taxes might be forced into foreclosure.
So the limits on property appraisals are designed to avoid those sorts of shocks.
How well they work and whether they are worth the other problems such limitations cause is still widely debated.
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