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Property Tax’s Effect on Market Value

 

The Town’s official stance is that property tax capitalization is a myth or a fiction. They claim that the tax burden on a property has no effect on its market valuation. Mr. Feiner and Ms. McCarthy would have you believe that two neighboring houses, all other things being equal, with house A having a granite countertop in the kitchen, and house B having a formica countertop but with $10,000 less in annual taxes, house A would command a higher price in the market! I don’t know about them, but I’d much rather save $10k every year!

Even Melissa Baer, a project manager from Tyler Technologies, admitted that for areas that were hit the hardest with tax increases, the market values would likely decrease as a result.

Taxes are clearly a major factor in any home purchasing decision. To say that a sale of a house in June 2015 when taxes were 10k would command the same market value as that sale price in July 2015 when taxes increase to 30k is simply ludicrous.

Although taxes are a factor in the sales prices and market valuations (and Tyler Tech agrees with this point), taxes were never considered a potential factor within the Tyler Tech algorithmic model. How could the model ever be considered accurate if a significant factor is not even used in the model? If they did not consider the acreage of the parcel, the model would clearly be rejected; likewise, this model should be rejected.

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