September 23rd, 2019 at 12:00 am
Answer: Probably not, in my opinion. The law requires tax assessors to assess property at its fair market value at time of purchase. Although the purchase price is presumed to be fair market value, the assessor can rebut that presumption by showing that the property would have sold for more if exposed for sale in an open market under conditions where neither the buyer nor seller takes advantage of the other. Tax assessors specialize in the valuation of property. Like real estate agents, they may find it obvious that a property in a certain neighborhood that sold for $800,000 is actually worth $1 million.
Additionally, a buyer must complete and file a Preliminary Change of Ownership Report (PCOR) before any conveyance occurs. The PCOR asks the buyer to provide information about the purchase, including an explanation of any special terms, seller concessions, and other information that would assist the tax assessor in the valuation of the property. In response to that, the buyer should disclose the $200,000 purchase outside of escrow of the seller’s furnishings worth only $10,000. After all, the buyer must sign the PCOR certifying under penalty of perjury that the information provided is true and correct to the best of the buyer’s knowledge and belief.
-Thank you to Anita Lischak (Brentwood Office) for suggesting this week’s legal tip.
Like what you see here? Sign up for more! Our free e-newsletter informs you of listings in your community, insider real estate tips, the latest in home trends, and more.
