Legal Question in Wills and Trusts in New York
How much is a real estate property valued as in regard to estate tax if there is unpaid mortgage principal on the property? By the property value or by the available equity? Also, is there a difference if the unpaid principal is from a mortgage proper, or form a home equity loan? Also, would the estate tax rate vary if it is a home lived in versus a rental property? Also, how is the property value assessed? Is it the same value as assessed for city property tax?
2 Answers from Attorneys
The value of the property for estate tax purposes is the market value minus any outstanding debt attributable to the property. For estate tax purposes, it is necessary for a property to be appraised -- it has no relationship to the assessed valuation.
Good luck to you.
I generally agree with Michael, although if the assessed value represents 100% of market value or can be equalized to market value, this calculation can be used to start the valuation process. However, in these erratic real estate market times, it may be better to obtain an appraisal, as the assessed value, even if it is said to represent 100% of market value, may be inaccurate.
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