We recommend that these residents interested in donating land to the city for a “tax reduction” based on the acreage reduction, consult with a realtor before making any moves. Our calculation indicates a land value assessment reduction of about 20-30,000, and with todays tax rate, a $250-400 tax reduction annually, which may not equate to the actual sales estimate. For example a 4 bed/2 bath/1800 sq ft house on .21 acres of land has a Redfin estimate of $555,000. Next door a 4 bed/2.5 bath/1800 sq ft house on .89 acres of land has a Redfin estimate of $659,000. Is an annual savings of a couple hundred bucks annually worth decreasing your home resale value by $100,000.
Land values, for assessment purposes are completely different. The first x area is a flat dollar amount, based on the size of similar properties in the neighborhood, and anything over that x area, is assessed at a reduced rate, the more in excess, the further the reduction. In the .21 acre example above, the land is assessed at $188,000. In the .89 acre example above the land is assessed at $210,000. That’s a $22,000 difference for 4 times the land. At the $13/mil tax rate, this difference will only yield a tax savings of $286 annually.
It seems, from at least where we are sitting here, the city will be the real winners here, obtaining land for their own purposes, without paying a cent to acquire it, and only taking a couple hundred dollar loss into perpetuity.
We would like to suggest that the owners of 161 and 155 Walnut St, who have already agreed to this ploy in theory – to rescind their donation offer. The city it appears will attempt to strip these two properties down to the standard in the neighborhood of approximately .2 acres which is valued at approximately $188,000 per the city assessor. Our recommendation is to ask the city to cough up $188,000 per fifth of an acre they desire. Land donations – will make you feel good, until you go to try to sell your house.
Don’t let the city screw you.