Because reducing your Market Value — even if not below your Capped (or Assessed) Value will pay dividends in the long run. Failing to do so can be very costly as soon as your Capped Value expires.
Market Value is what the market will support regardless of last year’s value, and Assessed (or “Capped”) Value is limited to a ten percent per annum increase since the last re appraisal. So if your Market Value went up by 20% (say, from $500,000 to $600,000) your Assessed (or Capped) Value would increase that year only 10% to $550,000. Suppose you can reduce Market Value this year only from $600,000 to $550,000. You will save no tax money this year despite the Market Value reduction. Why bother?
Because a successful protest produces dividends indefinitely in the future. Capped values eventually run out; they increase 10% per year up to your then Market Value. That $50,000 Market Value reduction foregone will cost you money as long as you own the property because future Market Values will be that much higher after the capped limitation runs out. And future increases — which are typically a percentage applied to the prior year’s value — will come from a higher base.
If you hire Property Tax Protest for a 1% fee (based on Market Value reduction) wouldn’t you invest, say, $500 (1% of a $50,000 reduction) to save $1,250 (2.5% tax rate applied to that same reduction) per year starting next year and continuing as long as you own the property? It’s a better investment than anything else available if you plan to keep the property more than one more year.
Of course, if we reduce Market Value below your current Assessed (or Capped) Value there will be monetary savings starting this year and continuing as long as you own the property.
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