HOA issues (not related to COVID)

[Brad1998RD]

"If you want to believe the tax assessor our 3 year old investment has already gone up 35%"

Tax assessment and appraisal (expected sale price)value are two different things. I've never seen the two align. With the assessment being higher than actual value.

[RossWilliams]

With the assessment being higher than actual value.

That hasn't been my experience. It appears to me that assessed values always lag the market. When the market is going up, they are lower than the actual value. When the market is going down, they are higher. Which makes sense since assessors rely on the past sales prices of comparable properties.

There is no reward for anyone in generally inflating assessed values. Property values have nothing to do with how many total tax dollars the government gets, only how the amount is divided among property owners.

[JML]

The then president of our HOA took it upon himself to decline my approved Architect Control Committee's plans leading to a much more expensive design and build, while accomplishing nothing in terms of looks, value or utility. He did so in an attempt to make me stop the addition of the RV Port. HOA's with limited powers and reasonable rules are acceptable, but when they allow board members to hijack the process, they are tyrannical and onerous.

[Davydd]

Originally Posted by Brad1998RD

"If you want to believe the tax assessor our 3 year old investment has already gone up 35%"

Tax assessment and appraisal (expected sale price)value are two different things. I've never seen the two align. With the assessment being higher than actual value.

I've owned property for over 50 years in Minnesota and the assessed value has alway been way lower than the price one would expect to get. Our new home of three years still lags in assessed value by about 4% from our purchase price and now about 15% of an identical house on our block that recently sold. New construction is closer than the real price but our home of 34 prior years was assessed 53% below our selling price.

The condo garage tax assessment was very close but slightly under the first year from what I paid and now tax assessed value 35% greater. I am guessing since there are not many condo garage units on the entire west suburbs of Minneapolis that the few turnovers since have been much higher. The developer of the complex selling my pre-owned unit out of 270 said it was the only one available at the time and there haven't been any new units built in the 3 years we've owned it. I can believe we could get 35% more after 3 years if not more. I just don't have to worry or think about it now.

If you are fortunate enough to have the opportunity to own such a condo garage I would say go for it rather than lamenting about your HOA restrictions. What I gather, there are not too many opportunities.

[mkguitar]

Originally Posted by Jon in AZ

The worst if it is the actual rules were created by a quorum of... zero! Developers and real estate agents foist their own priorities on future buyers.

as you live in AZ,



HOA's have outsized power in AZ and can issue fines and start foreclosure once the "debt" reaches $1200


Much of the Legislature is involved in property, think about that next you vote- the Leg allows HOAS this power



1.) our PW came from an owner in an HOA who had to apply 14 days in advance to put his B in the driveway during the day to load up/unload


2.) I bought in an area without and the CCR's expired in 1995



I'm ok with the purple trim 2 doors up and the plumber's work truck in the driveway just past them- sure came in handy when pipe broke at 9pm




People who buy in HOA's are seeking a certain "order" to their lives, and their interests should be respected

[jjustj]

I never had my camper there, nor would I be allowed to. I attended one HOA meeting. I walked away from that ,stating there should be an IQ test required to own property governed by any HOA!
3 hours of the same issues repeated over and over. Never again.

[Bruceper]

Unless you have no other choice, HOA's should be avoided. Please note that moving to a different country or perhaps even another planet is a valid choice.

Sure, if you're 90 years old and can't drive then an HOA is probably for you since you can be on the board and complain about kids walking on your lawn.

[Knit]

Originally Posted by RossWilliams

There is no reward for anyone in generally inflating assessed values. Property values have nothing to do with how many total tax dollars the government gets, only how the amount is divided among property owners.

The higher the assessed value the higher the taxes.

[avanti]

Property taxes are determined by two parameters: (1) assessed value of the property and (2) the tax rate (generally referred to as "millage rate"). You multiply the two together to get your taxes. Therefore, there are two knobs that the government can turn in order to raise or lower your taxes. "Fair market value" has nothing directly to do with this calculation.

The millage rate is typically the same for everyone in a constituency. However, the relationship between assessed value and fair market value is a matter of political convention. Some constituencies attempt to equate them. Others define assessed value as a percentage of FMV (e.g., assessed value may be defined as 1/3 of FMV). Still others make no attempt to define this uniformly (e.g., deliberate failure to update assessments wrt FMV is often used as an implicit subsidy to seniors, since they tend to have longer tenures in their homes.) Often you can get your assessment lowered simply by sending an email to a spec lawyer and agreeing to give him or her a percentage of whatever is saved.

The whole system is a mess and politically fraught.

[RossWilliams]

Originally Posted by Knit

The higher the assessed value the higher the taxes.

And the lower the taxes on someone else. There may well be some exception somewhere, but every property tax system I am aware of has taxing authorities set their budgets and then divides the bill based on property values. That sets the mill rate.

There are a lot of places where that basic system has a bunch of additional politics added ranging from homeowner relief to property tax limitations. But the assessed value is really only used to determine how the bill is divided, not how big it is. Raising property values doesn't bring in any more tax revenue.

[Winston]

Originally Posted by RossWilliams

And the lower the taxes on someone else. There may well be some exception somewhere, but every property tax system I am aware of has taxing authorities set their budgets and then divides the bill based on property values. That sets the mill rate.

There are a lot of places where that basic system has a bunch of additional politics added ranging from homeowner relief to property tax limitations. But the assessed value is really only used to determine how the bill is divided, not how big it is. Raising property values doesn't bring in any more tax revenue.

Ross makes a couple of good points. During the 'property value crash of 2008 we were surprised to learn that our taxes weren't going down . . . just as Ross said, they take their budget (always increasing it seems) and divide among the available tax payers. Thus, although our valuation was dropping, guess what, our taxes were increasing. So, fighting for a lowered assessment only (slightly) adjusts your overall percentage portion 'of the whole'.

And another point Ross raised that he called "additional politics". Michigan has one of the most unfair property tax systems of which we're aware. If you "homestead" in Michigan - - which means you send your children to Michigan schools - - you don't have to pay for them. Only the people who don't homestead have to pay for the schools. Now this is a slight exaggeration, Michigan 'homesteaders' pay 1/3 of the school taxes. Thus, when we became residents of Michigan, our property taxes dropped to 40% of what they had been.

The citizens of Michigan are smart - - when you have over 11,000 inland lakes and more Great Lakes shoreline that Alaska has coast, with much of this overall shoreline being the highest valued and mostly owned by out-of-staters or as 2nd homes (with no ability to claim homestead), why wouldn't you 'stick-it-to-them'?

Ok, we're off our soap box now.

[booster]

I don't recall for sure, but I think in our area of Minnesota, the assessor told me the assessed value was based on a formula that just looked at whet features you had, like a deck or extra garage, square footage, etc and didn't look at market value as such. The formula included some multiplier so it would catch inflation, big property values surges in general for the area not any specific property. It all seemed really odd to me. I think it was when I asked how much the taxes would change if I finished and heated the large detached garage we had just built and he said it wouldn't change, even though the building value would essentially almost double. This was all nearly 30 years ago, though.

[GallenH]

In Phoenix it operates in a similar way: lot size, house size, number of rooms and fixtures in the baths. But I think that they look at house size in terms of livable space so our garage doesn't count.

We live in a perimeter lot and there is a band of property which separates the outer wall of our lot to the street behind. That's property we own but the HOA maintains. So we do pay taxes on it. My wife tried to argue that the footage shouldn't be taxed at the same rate as our property within the fence since we could not really use that outside footage for any purpose. She failed.

[RossWilliams]

https://www.keatax.com/arizona-property-tax-fcv-vs-lcv/

I think there may be some confusion between how the value of condo common areas are evaluated for tax purposes and whether the property taxes are paid directly or as part of the homeowners association fee.

[Davydd]

I pay my own property tax. It is not part of the HOA fees though the HOA consisting of 16 homes does own the cul-de-sac street and common property. I technically own land 5 ft. out from my foundation. I'm not sure how that is taxed if it is especially the large storm water retaining ponds required by the city.

[GallenH]

Originally Posted by RossWilliams

https://www.keatax.com/arizona-property-tax-fcv-vs-lcv/

I think there may be some confusion between how the value of condo common areas are evaluated for tax purposes and whether the property taxes are paid directly or as part of the homeowners association fee.

In our case, the HOA owns no land at all. We have no common internal spaces like a small park or pool. The assessors map for our area shows the perimeter lots as extending all the way to the streets behind. Another way of looking at it is that the rear fence of our property is not at the back of our property and those who own perimeter lots have ceded an easement on this portion of their property "for the common use of all homeowners. So the HOA owns no property and pays no property tax.

[Jon in AZ]

I feel like we've strayed pretty far from how HOAs affect Class B ownership and use. This is beginning to sound more like a real estate forum...

[GallenH]

Originally Posted by Jon in AZ

I feel like we've strayed pretty far from how HOAs affect Class B ownership and use. This is beginning to sound more like a real estate forum...

And you would be................correct. Sorry. Back to matters at hand.