Real Market Value Or “Just Kiddin'” Market Value?

Your tax statement is loaded with numbers but the most prominent number is the Real Market Value which is near the top of the page. While this number is important, it can be deceiving. Consider the illustration below.

George Jones gets his tax statement and the statement says that the real market value is $1,000,000. George knows this is not correct because he just had a MAI appraisal on the property estimating the value to be $900,000.

So, he files an appeal at the Board of Property Tax Appeals, submitting a copy of his appraisal as evidence. He meets with the Board of Property Tax Appeals  and the board agrees that the real market value is only $900,000. The Board dutifully lowers the real market value to $900,000. A few weeks later George gets his revised tax statement and, sure enough, the real market value has been reduced by the board. Then, to his unpleasant surprise, he notices that the actual taxes are exactly what they were before the real market value reduction. Surely there must be a mistake. George calls the assessor’s office and asks to speak to whoever does the tax roll correction.

“Can I help you?” says a pleasant female voice.

“Yes.” George says. “I think there is some mistake. My real market value was reduced by $100,000 by the Board of Property Tax Appeals. Yet there is no reduction in taxes.”

After getting his account number and calling up the account on the computer, the tax roll correction lady comes back on the line. “Yes, I see that the Board did reduce your real market value by $100,000. But, you see, taxes are based on assessed value, not on real market value. Your assessed value has not changed at all. Therefore your taxes stay exactly the same as they were.”

Needless to say, George is very disappointed.