Several recent reports in local media have concerned alleged problems with the reassessment process in the Town of Amherst.

One newspaper article that stands out in my mind recounted the situation of a residential property owner who was irate over the sales the Town of Amherst relied on in developing his assessment.

This property owner complained that the sales the town based his assessment on were more than a year old and, therefore, were totally irrelevant to the current fair market value of his home.

In his opinion, the town would have derived a more accurate value for his property if it had relied upon the current list prices of similar homes as well as recent sales.

The property owner's outrage is understandable. However, the valuation and reassessment issues he raised are governed by law, as outlined in New York's Real Property Tax Law, and must be implemented as such. The Town of Amherst - as well as all towns in Erie County - is bound by the mandates of the law when arriving at its value conclusions.


Two important concepts must be understood in order to evaluate the validity of any town's fair-market-value determination. The first issue is the appropriate date on which to assess the physical nature of the subject property.

The physical attributes of a property are to be reviewed on the taxable status date, as defined under the Real Property Tax Law. The taxable status date is of particular relevance when valuing a structure that is in the process of being built and/or being destroyed.

Whatever portion of the structure exists on the taxable-status date of March 1 of the current year for all towns in Erie County is the portion of the structure that will be carried on the assessment roll for the upcoming tax year. This is true irrespective of whether the structure is completely demolished or erected on March 2 or any later date.

The taxable-status date is close in time to the filing of the tentative assessment roll in May in an effort to be as fair as possible to the owner of the property, while giving the assessor enough time to review the physical structure of the properties to be included on the current roll.


The second dispositive issue to valuing a property is determining the date on which the value is to be derived. This is known as the valuation date of the property under the Real Property Tax Law.

The valuation date is further back in time than the taxable-status date under the recent revisions to the Erie County Tax Act. In all towns in Erie County, the valuation date for the upcoming assessment rolls to be filed in May of 2009 is July 1, 2008. The lapse in time from the valuation date to the date on which the assessment roll is to be filed is significant in its implications.

The valuation date is the date on which all comparable sales are to be analyzed under a market approach to value. The valuation date is also the date on which all income and expenses will be analyzed to determine the income stream to be capitalized in an income approach to value. In an appreciating market, a valuation date that occurs almost a year earlier in time may work to the benefit of the property owner, as the property owner can defer realizing, for another year, the appreciation that occurred over the prior year. Similarly, for an income-producing property, the income stream may be lower in the prior year, thus decreasing the value derived by a capitalization-of-income approach to value.

In the current economy, however, property owners are bound to lose. The assessment rolls to be filed this May in all towns in Erie County are not required to recognize the drop in the market that has occurred since July 2008.


Further complicating matters is that the Real Property Tax Law precludes any modification of the assessment for three years forward on commercial properties, and one year forward in residential properties, if the assessment is the product of a court order or judgment.

This statutory limitation is a critical factor when deciding whether to pursue a claim in the current year or wait a year to fully realize the decline in the market given the current real estate market.

Of course, if the economy keeps going down, the issue then becomes when best to lock in the value for assessment purposes to realize the most gain in tax savings from any depreciation realized.

Achieving "fair market value" for tax-assessment purposes is market value, according to the Real Property Tax Law.

Karen Cook Serotte is a lawyer with Brown & Kelly LLP. She can be reached at kserotte@brownkelly.com.