In this New York Time’s article, fashion photographer, Fabio Chizzola, shares his new passion: a 32-acre apple orchard.  Reminiscent of his childhood days back in Italy, the NYC resident is having a blast bringing back to life the old, abandoned apple orchard on the upstate farm he bought with his wife.  Not only is the farm a labor of love for Mr. Chizzola and his family, but in unearthing a stash of old photography equipment he learned that a previous owner shared his passions: farming and photography.  Mr. Chizzola says “I’m attached to the land”.

To read the full article, click here.

I recently completed phase one pricing and marketing disposition work for clients who own a landmark property that is largely conserved.  The property tax issues that I uncovered in that work reminded me of the importance of this topic, and the need to keep property owners abreast of key issues to be on the lookout for.

I thought it would be helpful to start with the basics of property taxation in this entry, and then address key issues in following entries.  I plan to address the topic “assessment of lands encumbered by a conservation easement” next.

A property tax is an ad valorem (according to value) tax levy on the value of property.  Most often, the value of the property used to calculate a property’s tax is its assessed value.  Assessed values reflect a property’s combined land and improvement value.

In the U.S., property tax on real estate is usually levied by local government, at the municipal or county level.  Depending on the size of the community, the assessing body can be one person, a group of people, or an outside firm contracted by the local body responsible for establishing the town-wide property assessments.

The assessor’s, or lister’s, office is where you will find the person or people responsible for setting the assessed values.  Often times, when you are dealing with low-density, rural communities the local assessor will be a volunteer; as opposed to a professionally trained real property valuation expert. Herein lies one of the greatest problems with the rural property tax system in the U.S. – at least in my opinion, and especially when you are dealing with specialty properties (luxury, green, excessively large for the area, etc.).

You cannot expect volunteers to do the work of specially trained professionals.   Consequently, you cannot expect the values upon which property taxes are based to be credible.  The end result is a property taxation system fraught with errors and unfairness.  If that weren’t enough, despite the fact that the errors and unfairness emanate from the taxing authority, the burden of proving the errors and unfairness falls on the property owner.

Based on my experience, property specific tax problems are predominately borne out of the lack of experience of, and inadequate training provided to, the parties responsible for determining the property’s value for tax liability calculation purposes.  It is the lack of experience and inadequate training that causes the more detailed problems that I find, such as inconsistent application of unit values across multiple tax parcels for a single ownership, misapplication of market data, and failure to properly account for a property’s conserved status or deed restrictions.

While property tax systems can be complex, let me simplify by saying that your property tax bill reflects the coming together of two important pieces of information: the tax rate and the property’s assessed value.  The former you have no say over, really.  The latter, however, is subject to challenge.

The property tax rate is set by the taxing authority.  It is often expressed as a permille (amount of tax per thousand currency units of property value), or a mill (one-thousandth of a currency unit).

It is important to pay attention to your annual property tax bill, and understand how it gets calculated.  Unless you are an expert in real estate valuation/ appraisal, you should find an expert in this field to help navigate you through the Q & A process in trying to determine whether or not your tax bill should be challenged (often referred to as ‘grieved’).  It is paramount to work with an advisor who understands the property tax system used in the location where your property is situated.

Many landowners turn to their real estate attorney to provide guidance.  While many attorneys have a firm understanding of the process for grieving a tax bill, most do not have the professional capability to tell you what you most need to know: has the taxing entity properly arrived at my property’s value for determining my tax liability?

If you want to grieve your tax bill, more likely than not, you will be challenging the assessed value placed on your property.  To increase your chances of a successful appeal, you will want to engage a valuation expert.  In a separate entry, I will discuss what you should look for in an expert, and the scope of work and work-product terminology you should be familiar with so that you are sure to engage the expert to do exactly what you need at exactly the right point in the process.

Why should you care about your assessed value and property tax bill?

• First, the assessed value has a direct impact on how much your property tax bill is. If your assessed value has been erroneously over-stated, it could result in a higher property tax bill and you will want to take timely action to maintain your right to appeal.
• Second, your property tax bill has a direct impact on your annual carrying costs.  Property taxes are often the highest expense.  Pay what is fair, but it is not always prudent to simply pay the bill without knowing the value was properly arrived at.
• Third, it illustrates diligent ownership.
• Finally, you want to ensure accuracy so that if/when you decide to sell the property you can be assured that the tax bill reflects a fair and credible value for your property.  Any sophisticated buyer will review the property’s tax history and annual liability.

- Rob Sennott | Seaver Hill

Earth Asset’s specialty counseling services are now complemented by equally specialized brokerage services focused on conservation, large acreage, complex, ecologically-significant, and luxury properties.

Earth Asset’s portfolio of listings already totals over $30-million dollars, including two of Vermont’s most exceptional properties and a landmark Lake Michigan estate.

Further exciting news is that Earth Asset has a new office at Teal Farm in Huntington, VT. The flagship project of Living Future, Teal Farm is an ecologically-designed farm, preserve, living and working environment (tealfarm.com); an inspirational place to engage in important counseling and brokerage work.

If that’s not enough, Earth Asset has a new website! EARTHASSET.com is a marriage of beauty and brains. A gorgeously designed site built for optimal user-ease with state-of-the art functionalities, full of information and advice about key issues in real estate.

This is an exciting time for Earth Asset, as the company grows and responds to new directions in the global marketplace and the call for leadership and excellence in the real estate industry.

We are pleased to provide a client testimonial for Ms. Shawn Smith, Founder & Owner of Earth Asset Partnership, LP. We have known Ms. Smith since 2005 when we engaged her to represent our family land interests in Southern Vermont.

Our family owns and manages a large property which combines a historic homestead, iconic rolling hills and extensive managed forest tracts for which Shawn has provided a variety of real estate services. Shawn brings an unusual suite of skills and high level of professional qualifications in valuation, legal documentation, conservation and brokerage. Trained as a lawyer and an expert in valuation and land planning analysis, she possesses a professional toolkit that supplants hiring a number of experts to fill the role she handles alone: attention to contract detail, a keen and accurate assessment of property and timber assets, impressive writing and presentation skills to showcase your property from perspectives that brokers of narrower background would be inclined to overlook. By virtue of this deep professional bandwidth, Shawn creatively and collaboratively can develop financial, legal, and conservation options with property owners seeking not simply to market their land holdings but to do so in responsible and beneficial ways. Shawn also has a strong network of brokerage colleagues at Earth Asset and outside specialists that she does not hesitate to engage when circumstances require. What is however most remarkable about Shawn is the passion, integrity and energy that she dedicates to her work and the sense of responsibility she brings in representing the interests and objectives of her unique clients. She has treated every aspect of involvement in our property as if it were her own.

We speak with confidence because our own family has been involved in real estate land, development and management for more than 50 years. We know of no other real estate professional that could bring more skilled and thoughtful engagement to the table for our Vermont property than Shawn Smith. We highly recommend her and Earth Asset to prospective clients as a go-to real estate expert.”

- Sincerely, Michael and Jim Tomasso | Smokeshire Valley Preserve

Though I hadn’t heard of Earth Asset until then, I ultimately chose founder Shawn Smith to market and broker my property because of her energy, a glowing reference from another client, and her valuable expertise in realms outside of the brokerage world–appraisal, law, and conservation. I have never encountered another advisor–much less a broker–who could grasp and advise about so many dimensions of a property, particularly with respect to all that goes in to preparing it for market.

Throughout the course of working with her, I have come to trust Shawn implicitly, and can vouch for her consummate professionalism and integrity. I now know her personally, and have witnessed her mastery and poise in different business settings, bringing both clear communication and deep listening to the consulting table, and fairness in all her dealings with a wide spectrum of personalities.  She truly cares about her work and about each one of her clients.

She is now consulting on and brokering two additional properties I have an interest in; one held in a family trust, and another owned by my not for profit foundation. With each listing, she has righted the mistakes and oversights of the past to bring each property to its proper position in the market, won the respect of other professionals associated with the each property, and developed terrific maps and information packets that wow buyers and other brokers alike.

Quite frankly, there should be another professional category to describe what Shawn does, because ‘broker’ and ‘consultant’ don’t convey the breadth of her capabilities.

I can’t recommend Shawn highly enough.”

- Melissa Hoffman, Founder, Living Future Foundation | Teal Farm