Published on November 8th, 2023

Grieving a Short Sale, Auction, or Foreclosure

Navigating Property Tax Appeals in Unique Home Purchase Scenarios

Aventine Properties | 3 min read

Many homeowners wonder whether they can grieve or appeal their property taxes after purchasing a property through a short sale, foreclosure, or auction. The ability to do so largely depends on various factors, including the circumstances of the purchase, the assessed value of the property, and the local tax laws.

After purchasing a home at a price that is lower than the current Implied Fair Market Value, it is advisable to grieve the property’s assessment. However, that is usually only applicable for arms-length sales. An “arm’s-length” sale refers to the purchasing of a property at a fair market value—meaning that there are no outside factors that heavily influence the price of the home. If a sale is considered “non arm's-length,” it typically means that the buyer gets a special price because of a certain reason (such as a short sale, auction, foreclosure, ect). In these circumstances, the sale price is not an accurate representation of the market value/worth of the home.

1. Assessment Value and Purchase Price

One of the critical factors in determining whether you can grieve your property taxes is the assessed value of the property compared to the purchase price. If you bought a property through a short sale, foreclosure, or auction at a significantly lower price than its assessed value, you may have a legitimate reason to seek a reduction in property taxes. Tax authorities often use assessed values as the basis for property tax calculations, and a substantial difference between the assessed value and purchase price may justify a tax reduction.

2. Recent Purchase and Reassessment

In some areas, a property's sale triggers a reassessment of its value, which can impact property taxes. If your purchase led to a reassessment that increased the property's assessed value and subsequently raised your property taxes, you may want to explore the possibility of appealing the reassessment. However, the rules regarding reassessments and tax appeals can vary by location, so it's essential to understand the local regulations.

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3. Local Tax Laws and Regulations

Property tax laws and regulations can differ significantly from one place to another. Some jurisdictions may allow property tax grievances regardless of the purchase circumstances, while others may have stricter guidelines. It's crucial to research and understand the specific rules and deadlines for property tax appeals in your area. Consulting with a local tax professional or attorney may also be beneficial in navigating the process effectively.

4. Timing and Deadlines

Timing is crucial when it comes to property tax appeals. Most jurisdictions have specific deadlines for filing tax grievances. If you've recently purchased a property through a short sale, foreclosure, or auction and believe that you should pay lower property taxes, it's essential to act promptly and file your appeal within the prescribed time frame to have the best chance of success.

5. Professional Assistance

Navigating property tax appeals can be complex, especially when dealing with unique purchase circumstances like short sales, foreclosures, or auctions. Seeking the assistance of a qualified tax professional or attorney with expertise in property tax appeals can be invaluable. They can help you assess your eligibility for a tax reduction, gather necessary documentation, and guide you through the appeal process effectively.

In conclusion, the ability to grieve your property taxes after purchasing a property through a short sale, foreclosure, or auction depends on various factors, including the assessed value, recent reassessment, local tax laws, timing, and professional assistance. If you believe you are paying more than your fair share of property taxes, it's essential to research your local regulations and consider consulting with a professional to determine your eligibility and navigate the appeal process successfully.