Question: Is it possible for me to get a refund on my property taxes if my home sold for under tax assessment? If so, what are the steps? Has anyone successfully been able to accomplish this?
Answer: Earlier this year, Adam addressed a question on property assessments, but your first question is a good one and differs from what’s already been discussed. I’ll answer the last two questions first so I can explain the first a bit easier.
Your tax payment is based on (.996 percent of) your home’s annually assessed value by an appraiser/assessor in Arlington’s Department of Real Estate Assessment. Every year, you have an opportunity to appeal the valuation and yes, it has been successfully accomplished, but the burden of proof is on the homeowner, not the County.
Arlington offers two informative web pages on how they determine property value and the appeal process.
Quick hits on the appeal process:
- Expect to receive your 2015 assessed value in January 2016 (usually closer to the end of the month)
- Your first appeal with the Department of Real Estate Assessments must be filed by March 2, 2016
- Step 1: Call 703-228-3920 for information on how your assessment was determined
- Step 2: File your appeal online (First Level)
- Step 3: An assessor will visit your home and you can provide relevant info to make your case
- Step 4: If you’re not satisfied with the decision or have not received written notice by April 1, file your second appeal with the Board of Equalization online (Second Level) by April 15
- Step 5: If you’re not satisfied with the decision, your final option for appeal is with the Circuit Court, which will likely require you to hire an attorney (better be worth it!)
Now to your first question, which I’ll separate into two parts:
1) Can I get a refund?
A scenario in which you receive an actual refund is fairly unlikely because, unless you go to the 3rd level of appeals (Circuit Court), you should have a decision from Arlington before your first tax payment is due, which is June 15. In the event that your assessed value is reduced after you make your tax payment(s), the County will either hold the excess payment and apply it towards your next payment or issue a refund.
If I had to guess, the question was probably about getting a retroactive refund on previous tax years (home sold in 2015 for $50,000 less than assessed value, can I get a refund on that over-valuation for the last few years?). Unfortunately not. The appeal process is only for the current tax year and cannot be applied retroactively. Thanks Joe Aiken, CPA, Aiken & Co for confirming this!
2) If my home sells for less than the assessed value, is that enough to justify a reduction in my assessed value?
Sales price alone is not enough to justify a reduction. Instead, your home’s sales price would be one of many factors an assessor will use to determine if your assessment is accurate. In fact, most homes in Arlington sell for significantly more than the assessed value, so overall, we should be glad the County doesn’t adjust the tax value based on a single sale.
Your Realtor is a great (commission free) resource for anybody appealing an assessment. We have full access to micro (past and pending sales) and macro (trends) neighborhood market data that can help you determine if your property is over-assessed and then easily communicate that to an assessor. One other helpful tip when making your case is to understand that the assessor uses data from Sept. 1 to Aug. 31. For example, your 2015 assessment is based on market data from Sept. 1, 2014 to Aug. 31, 2015 for taxes paid in 2016.
Facts & Figures
I pulled figures for the last 12 months of home sales in Arlington and found the following:
- On average, homes sold for $88,502 more than its most recent assessed value
- The median home sold for $45,900 more than its most recent assessed value
- Only two homes sold for exactly the same amount as the assessed value
- The greatest positive difference in sales price to assessed value was $1,684,667
- The greatest negative difference in sales price to assessed value was $693,200