In the image above you can see a number of things. The individual dots represent the value of different houses. The blue line is a trend line that charts the trend of the individual dots. This blue line is the regression line. This line is calculated by computers using complex mathematical models. The red dotted line is the deviation between the trend line and the true value. The computer will follow the trend line to assign a value to your property. The house can be worth more or less in real life. The red dotted line therefore indicates the size of the difference between the value of the computer and the real well-valued WOZ value.
Not a perfect estimate
We can see in the image that in the end hardly any house has been perfectly valued by the computer. All values are not on the trend line, but below or above it. If the dot is below the trend line, your home is valued higher than it is actually worth. The opposite is true for the dots above the trend line.
This is difficult stuff to understand. However, what you should take away from it is that the estimate of the tax officer with a computer is not always correct. The tax official tries to make the red lines as small as possible so that the value corresponds most closely, but that is not always possible. There is a good chance that your home is not valued properly. However, this does not mean that your home always has a WOZ value that is too high. It is also possible that your home is valued too low. If you object to the WOZ value, your home cannot be valued higher, so you do not have to pay more tax. Because of this, you can never get worse from an objection. Want to know why? Click here for an article on the matter.
We have seen in the above explanation that the value of your home can never be estimated perfectly. It often happens that your home is valued too high, but your home can also be valued too low. Because it is difficult to explain how the tax officer estimates the WOZ value using a model, we tried to explain it as briefly and as well as possible. It should be noted that this is not the full picture. There is of course much more to models that estimate your WOZ value. That is precisely why it is difficult for citizens to understand how the WOZ value has come about. After all, there remains a 'black box'. No one except the tax authorities and municipalities therefore knows how the WOZ value is estimated exactly.
Questions or remarks? contact us. We will gladly assist you.