Tax Assessments

I noticed something when I took a look at the DC Real Estate Tax Assessment database. It is pretty much a given that the city will assess properties to be worth more than they were last year, so that, I expected. Yet when I took a look at the “Preliminary Assessment Roll” which breaks down the property values into land, improvements, and the total value I noticed a big change from the current value and the proposed value. DC has decided to pump up the land value.

Sample Assessment:

What is assessed Current Value Proposed New Value (2007)
Land $88,150 $259,920
Improvements $105,910 $122,200
Total Value $194,060 $382,120
Taxable Assessment: $194,060 $382,120

The above table I swiped from the database to show how the land value was increased. So the 2007 assessment will make the fact that one house is a rehabbed jewel and the crack house next door irrelevant because the land (provided they are similar plots) is worth the same.

4 thoughts on “Tax Assessments”

  1. Seems to make sense to me. Here’s why. Assuming the city is going to assess property X for $100. Whether they do land for $90 and improvement for $10 or vice versa, you pay the same taxes. By weighting the land more heavily, you nab the slumlords who have been getting an effective tax break by leaving their property run down. Seems to be good public policy to me.

    However, I’m concerned if they boost the land value substantially and then later start running up the improvement component in subsequent years. Or they could boost the land value and hold the improvement value– still effectively increasing everyone’s taxes. The cynic in me says this will happen. The cynic also says this is a way for the city to boost taxes collected on properties that aren’t changing hands for substantial increases anymore. Got an abandoned lot that’s unimproved? Fine, we’ll just jack your land value and stick you with a tax increase from that.

    Who knows. I do think think owners of abandoned property need to be encouraged to develop the property. This seems to do that. No?

  2. Actually, this change started happening last year. I know because I fought my 2006 assessment and spent about two months analyzing the assessment database. I also read through the materials regarding the assessment process. I think the assessed value of vacant land may have been driven up by recent purchases of certain lots, where the land, sans house, was more valuable because it permitted larger construction.

    This type of assessment can also throw off values block to block. For instance, my property has no front yard and is located on a street with numerous vacant properties, but the land value was assessed at the same level as the cute rows of townhouses on the block over. I won my appeal, but my initial assessment was more than $100,000 above the price I had paid for my house two week earlier (the official assessment date was two weeks after I closed on my house). I spent about two months compiling spreadsheets, reading assessment reports and compiling photographs.

  3. Land- dirt stuff stands on
    Improvements- stuff standing on dirt. It could be a designed palace or a crack-shack. When the city decides that the stuff sitting on the dirt plays less of a factor in figuring your taxes, it adds weight to the phrase “location, location, location.”
    Yeah, it does stick it to the abandoned and vacant landlords without having to judge how worthless the “improvement” (ie hulking shell) is. But I sense that in the long run it will bite everyone in the butt.

Comments are closed.