Dan's Papers - May 29, 2009

May 19 was "Grievance Day" in Southampton - the one day out of the year when homeowners could challenge the town's figures on the current value of their properties. Nearly 9,900 Southampton Town residents got notices about an increase in the assessed values of their homes.

To understand the ins-and-outs of residential property assessment, visit the New York State Office of Real Property Services website. It explains in great detail how the town assessor keeps assessments up-to-date and equitable each year, ensuring that tax payers don't pay more or less than their fair share.

In a nutshell, residential property assessments are estimates of the market value of real property in a given community. In other words, the market value is how much the property would sell for under normal conditions (normal being the operative word in this economy). The assessor determines market value by comparing similar properties in similar neighborhoods ("comps") and estimates how factors like home additions or new construction might affect the market value.

New York State law requires all properties (except those in New York City and Nassau County) to be assessed at a uniform percentage value within the community every year. Each assessment is a percentage of market value - called the Level of Assessment (LOA). An LOA of 50% means that assessments are at half the market value; an LOA of 100% means that a town (such as Southampton or Shelter Island) is assessing at full market value. Therefore, if the market value of a home is $100,000 and the town is assessing at 100% of market value, the property's assessment should be $100,000.

Each year, to maintain a uniform LOA, the assessor will analyze all the properties in the area to determine which assessments need to be changed. Assuming that the assessments have been kept up-to-date and market conditions have been relatively stable, not many assessments will need to be adjusted.

In this economy, it's a tricky situation. Current assessment does not reflect the current economic situation. The recent assessments were conducted from July 1, 2007 (prior to the official start of the recession) through July 8, 2008. Homeowners who question whether the assessor has the correct information can check with the assessor's office and see if all the data for that property is accurate. Should the owner believe that his property has been over-assessed based on market value of the home, he can arrange for an informal review with assessment officials. This could prove to have a better outcome for the homeowner. According to John Cronin, former Shelter Island town, assessor, "During an assessment review, assessments can be lowered or stay the same, but never increased according to state law."

However, if the homeowner still feels that his property was over-assessed, he may request a formal review. To file, application instructions and deadlines can be found on the New York State Office of Real Property Services website.