What Is Variance
A variance is a formal exemption from local zoning restrictions that allows a property owner to use their land in a way that normally violates the current zoning code. The local zoning board or appeals board grants variances when strict application of zoning rules creates undue hardship due to unique property characteristics.
In property tax assessment appeals, variances matter because they directly affect how your property should be valued and appraised. A property with a granted variance often has different market value than comparable properties in the same zone, since it has unique use rights that standard zoning wouldn't allow.
How Variance Affects Your Assessment
Assessors typically rely on three appraisal methods: the sales comparison approach, the cost approach, and the income approach. When your property has a variance, comparables (similar properties that sold recently) become harder to identify, since most properties in your zone don't have the same use rights.
This matters during board of review hearings. If the assessor valued your property using comparable sales from properties without variances, you have grounds to challenge the assessment. Request that the assessor account for the variance when selecting comparables, or demonstrate that the assessment ratio (your assessed value divided by your property's fair market value) is higher than others in your class and jurisdiction.
Typical assessment ratios range from 30% to 50% of fair market value depending on your state and property class. If your ratio is disproportionately high due to improper comparable selection, present this evidence to the board.
Common Variance Types in Assessment Disputes
- Use variance: Permits a different use than zoning allows (residential on commercially-zoned land, for example). This significantly impacts value since income potential changes.
- Area/dimensional variance: Allows setback, lot size, or height deviations. These typically have smaller value impacts but still affect comparables selection.
- Conditional use permit: Technically distinct from a variance, but functions similarly by allowing specific uses. Assessors sometimes conflate the two, which can work in your favor if the distinction weakens their valuation approach.
Documenting Your Variance for Appeals
Bring the following to your board of review hearing:
- The original variance grant document showing the specific restrictions or conditions
- Any conditions attached to the variance (time limits, operational restrictions, etc.)
- Proof that the variance was legally granted and remains active
- Documentation showing how the variance was (or was not) factored into the assessment
If the assessor's appraisal report doesn't acknowledge the variance or uses comparables from properties without equivalent variances, that's a documentation gap worth highlighting to the board.
Common Questions
- Does having a variance automatically lower my property tax assessment?
- Not automatically. A variance only affects your assessment if it increases or decreases market value compared to standard zoning. A variance allowing agricultural use in a residential zone might lower value. A variance allowing commercial use in residential might raise it. The assessor should factor actual market impact, not the variance itself.
- Can I use comparable sales from properties in different zones if they have similar variances?
- Yes. This is actually stronger evidence than comparables from your same zone without variances. If you find recent sales of similarly-zoned properties with identical variances, that's the most defensible comparable set for a board of review hearing.
- What if the assessor claims the variance doesn't affect value?
- Challenge this assertion with market data. If you can show that similar properties with the variance sold for measurably different prices than similar properties without it, you have economic proof the variance impacts value. Bring recent MLS data or appraisals to support this.