Buffalo taxpayers are bracing for mail they might not want to see.
Late this month, the city will send out notices letting property owners know how they will be impacted by the 2020 citywide property reassessment.
According to the city's Assessment and Taxation Department, the goal of the reassessment is to ensure that property owners pay only their fair share of property taxes. If one property or neighborhood is significantly under-assessed, not only are they paying too little in taxes, other property owners are subsidizing their share of the city's tax bill by paying more, officials say.
There are 110 neighborhoods in Buffalo with 68,000 residential properties that have been reassessed, said Joseph H. Emminger, president of Emminger, Newton, Pigeon & Maygar Inc., the real estate appraisal and consulting firm hired to assist the city in the reassessment project.
Every home was compared to five comparable properties in the same neighborhood, with a computer program picking out the five comparison sales, Emminger said during a recent public information session at the North Buffalo Community Center.
"We looked at over 90,000 residential and commercial properties," Emminger said. "Ultimately, based on comparative sales, we came up with valuations for every property."
Residents looking to sell their homes may welcome a higher assessment, which could lead to a higher sales price. But some longtime homeowners — like a senior citizen who attended the meeting and lives in the Parkside neighborhood — are worried they will see significant increases in their property tax bills as houses that have not been sold in years are reassessed based on recent sales of comparable homes.
The woman, who asked not to be identified, said she has lived in her Summit Avenue house for more than 30 years and is worried about her tax bill going up significantly, primarily because some homes in her neighborhood have been selling for $400,000 or $450,000 in the last four years. People are paying cash and waiving inspections, she added. One house sold for 25 percent over the asking price. Many of her neighbors live on fixed incomes and have no intention of selling, but they may face difficult challenges if their tax bills increase significantly because of the surge in neighborhood home sales.
On the other hand, Jeanine Baran, who lives in the city's Masten District, said she isn't worried that her tax bill will go up.
"No big deal," she said, adding that people may be worried because they do not understand how the revaluation process works.
"People are afraid of the process," she said.
So, just how does the process work? Here are answers to some basic questions:
Question: When can I expect to see the new assessment on my property?
Answer: Disclosure notices will be mailed to taxpayers at the end of this month.
Q: What can I do if I don't agree with the assessment?
A: Informal review sessions start in September. Information on locations and scheduling of sessions will be posted on the city's website and included in the impact notices coming out later this month. The informal review process involves one-on-one meetings with the contractor, in which property owners should provide proof of lower value such as an appraisal, photos, or surveys. Property owners will be notified of a decision by mail at the end of November.
Q: What if I'm not satisfied with that decision and want to file a grievance?
A: The Board of Assessment Review (BAR) grievance filing period runs from Dec. 1 to Dec. 31. Hearings start Jan. 1 and are more formal than the informal review sessions. Property owners must complete New York State grievance form RP-524, which they can get at the Assessment and Taxation Department in Room 101 in City Hall, or from the city's website at www.buffalony.gov.
Q: When will I get a decision from the board?
A: The board's decisions will be sent to property owners by March 1.
Q: What if I'm not satisfied with the BAR decision?
A: You can file for a Small Claims Assessment Review hearing, which only applies to owner-occupied residential one- to three-family dwellings. A hearing officer — typically an attorney — is appointed by the court. A $35 filing fee set by New York State is refundable if your claim is successful. The hearing officer's decision is final.
Q: When will I have to start paying taxes based on my new assessment?
A: The city will adopt its final tax roll on March 1, which will include all revaluated properties. The first tax bills impacted by the reassessment will be mailed to homeowners July 1 for city and sewer taxes, and in January 2021 for Erie County taxes.
Q: What are the odds my property value will increase, decrease or remain the same?
A: About 1/3 of properties will fall into each category, officials say.
Q: Does a higher assessment automatically mean my tax bill will go up?
A: Not necessarily. Your tax bill depends not only on your assessment, but also on the tax levy — the amount the city decides to raise in taxes to help fund the budget — as well as how much the city's total taxable value increases or decreases. According to Emminger, that combination of factors means your property tax assessment could increase while your tax bill decreases.
"It's going to happen to a lot of property owners," he said.
As a hypothetical, he cites a home whose assessment increases 25%, from $100,000 in 2019 to $125,000 in 2020, while the tax levy remains constant at $140 million and the city's total taxable value increases from $6.6 billion to $8.415 billion, a 27.5% increase. In that example, dividing the $6.6 billion by $1,000, to get a per-thousand figure, and then dividing the $140 million by that $6.6 million yields a tax rate of $21.21 per $1,000, or a tax bill of $2,121 on the $100,000 home. In 2020, the same computations on the $125,000 home, but with the city's higher overall taxable value of $8.415 billion would yield a tax bill of just $2,080, he said, even though the assessment went up.
Of course, that homeowner also could end up paying more next year, or seeing the tax bill remain flat. It all depends not just on the assessment, but on the city's overall taxable value and the levy that officials set in the city budget.
Q: Can the city raise property taxes as much as it wants?
A: No. The state's property tax cap law establishes a limit of 2 percent or the rate of inflation, whichever is less, on the annual growth of property taxes the city can levy.
Q: When was the last citywide reassessment conducted?
A: The last citywide revaluation took place in 2001.