One of my clients received an interesting letter from the Maricopa County Assessor’s Office in 2016. The letter said there had been an arial assessment of the rental house he owns. The “flyover” showed the livable square footage was larger by 159SF than currently reflected in the tax records. Therefore, the property taxes would be increased in 2017 for this additional livable square footage or about 12.6% more than in 2015. The change could be appealed 60 days from receipt of the 2017 Notice of Value. The notices are scheduled to be mailed on March 1, 2016.
My client was questioning the accuracy of the arial assessment. I agree it could be incorrect. One example would be a storage room that is not heated or air conditioned but is under the main roof. Looking at the house from the air it would appear the storage room was livable when in fact it is not. If an appraiser was trying to determine the livable square footage the storage room would be excluded. And what about the covered patio that has been converted to a screened in Arizona Room? An appraiser would not consider this livable square footage since it is not heated or cooled.
So how does an owner challenge this increase in square footage if they do not believe it is accurate? One way is to hire an appraiser to measure the house. Appraisers will typically do this for a nominal fee of $200 $300. The owner would submit the appraiser’s measurement to the assessors office if the livable square footage is smaller than the arial canvass. In my opinion there will be many challenges to the increased square footage. Appraisers will probably see an increase in requests to measure the livable square footage of the house so the homeowner can fight the property tax increase. There is no question as to whether or not it will be worth the appraisal measurement expense as once this tax increase goes into effect it will be there forever.
Text of the letter:
“The Maricopa County Assessor’s Office canvassed over 45,000 properties for the 2017 valuation cycle. We compared recently updated street and aerial photography to our property records. Included in the canvass project was your parcel at 1234 Easy Street, Phoenix, AZ.
As a result of this canvass, one of our appraisers updated our property records to include what currently exists on your parcel. (The letter includes a chart that shows the livable square footage measurement before and after the canvass and the increased livable square footage of 159SF.) Based on the updates to your property’s characteristics, a Rule B calculation of the Limited Property Value (LPV) per A.R.S. 42-13302 will be applied for the 2017 valuation year as required when there is:
1) a change from the prior year’s Full Cash Value (FCV) of +/-10% and/or
2) the square footage of the improvements increased by 5% or more.
The statutory Rule B calculation sets the LPV “at the level or percentage of the FCV that is comparable to that of other properties of the same or similar use or classification.”
The canvass review helps ensure our records are as accurate as possible, and the properties in Maricopa County are fairly and equitably valued. If you have any questions regarding this letter, you may contact our office at (602) 506-3406 or visit our website for more information. . . (Note the website the letter refers to does not exist on the assessor’s website.)