Property tax appeal.
Find how to appeal your property taxes, including the steps to take. It is free to do and the only “cost” is your personal time in doing some research. Learn about the forms to file, how to identify errors or comparable home sales, and the benefits of appealing the assessed value of your home. A property tax appeal will often help homeowners save money.
Overview of the property tax appeal process
Historically property tax increases were largely the result of rising home values. However more recently, with the steadily growing housing market in many parts of the country, many real estate tax increases are the result of the increase in rates set by local assessors. This means that the local government is in effect trying to bring in more revenue, and they do this by asking more from homeowners.
While a property owner can’t do much in regards to the rate, one thing they can do at anytime is to try to save money on their real estate taxes. This involves determining if the home assessment is fair when compared to other homes or if there are any errors in how your house is classified, such as square footage, number of rooms, etc. If the value given to the property is out of line to other homes, then homeowners can appeal the amounts involved.
Different formulas are used by local governments to calculate property taxes. The process varies widely by town, state, county, and city. But the bottom line is that the amount a household will need to pay in property taxes depends on a home's assessed value. You may be able to challenge that assessment, either yourself or by using a professional.
The National Taxpayers Union has estimated that over 50% of properties in the United States are overassessed. This means that almost half of the population may be able to save some money as too many people are paying too much in property taxes. The bottom line is that the property tax appeal process is not as challenging or difficult to do as many homeowners fear.
How to appeal property tax assessments
There is no standard formula to determine property taxes and what a house is assessed at. The process is different in almost every town or county, even those within the same state. Property taxes and the formula to determine them are determined by a disparate patchwork of local governments including cities, towns, or counties. They even include calculations from local school and local fire districts, and counties, all with their own rules.
1) First, the homeowner needs to establish a timeline. What month do the local assessments (annual real estate tax bills) go out? When is the cutoff for appealing? Anyone can quickly call a local tax assessor's office for help getting this information. In most municipalities the assessed value of the home is right on the property tax bill.
- The appeals process and deadlines vary from locality to locality. So does the amount of time that a resident is permitted to file an appeal. Sometimes a homeowner may have as few as 30 days to file. In other areas, the resident may have up to 120 days.
2) Look for errors in the real estate bill / statement. Property tax bill mistakes are more common than many people may think. Homeowners are responsible for catching the error and they need to point this out. Never pay for errors or mistakes that the assessor made. Most assessors do not even visit the property to inspect it. They instead rely on and compare a description of a house with that of similar homes in a specific neighborhood.
- The items to review include the address, lot size, square footage, when built, and the number of rooms. You need to note the appraised value of the property. Check the number of bedrooms, bathrooms, and everything else about their home with what the assessor has on file. Never forget any modifications you have made. For example, if you have torn down a garage in order to increase garden space, the home's value likely will have decreased. If that information is not on your property tax bill, then you can search your local assessor website or even call the property tax office for your home's appraised value.
- Also, appraisers may very well use historical information that is incorrect to calculate property taxes, and if they do, then that person is paying too much. As an example, a houses square footage might have been incorrectly stated or calculated on the original construction documents.
- Another common error. An assessor may have a slightly different thought process than the property owner does for their home. For example, the local tax assessor may be counting a screened in porch as a year round living area and the homeowner may only use it in the summer, so they may be paying high property taxes for something that is incorrect on the assessment.
3) If you expect an exemption, you need to compare any listed tax exemptions that you think you qualify for with what is listed on the statement. Some examples of who may get a reduction include a senior citizen over the age of 60, veteran, disabled person, and more. Tax exemptions will vary depending on your exact location, but you can also find this information on your municipal website, or by calling them. Make note of any differences that you find for presentation later. Read more on property tax exemptions.
4) The assessment may be higher than comparable homes. Another way to contest a tax assessment is to review how the home compares to other, similar houses in the neighborhood. Similar and comparable means homes of the same age, size, bedrooms age and general location. This can even be done through websites such as Zillow or Realtor.com. Or use a local county websites where property tax assessments are logged.
 Recent home sales in your immediate area can also be great comparisons. Also, look to see if a home that is similar to yours sold at a price that is lower than your appraised value. You can also consider hiring an independent appraiser to assess the value of your property, which will give you further supporting evidence.
- The exact location of the property matters too. For example, someone may live in a 550-home subdivision in Texas. But even within that large subdivision, there are absolutely differences that affect value and the property owner will need to help point this out to the assessor. A home near a busy road, or an entrance, in the community should be valued less than those on a creek, so the taxes paid need to be less.
- A member of the community can find information on comparable homes and their assessment as well values at the assessor's office. Most municipalities now also have this information online, so google for it. If the homeowner does not want to do this work and needs help, then hire an attorney, property tax consultant, or even a realtor. Get tax data on five to ten comparable homes and see what they are paying for taxes. This is public data and is at the assessors office or online, and by law, they need to help show you how to do the research.
- Once the owner has the data, go over the numbers and then they can decide whether they have a case. If the data shows that the assessment is higher than comparable neighbors homes, then that person is paying too much in taxes.
The individual will need to contact their assessor's office and they should first try to arrange a one-on-one, informal meeting. They can write, call, or stop by their office. If they decide to write their local assessor, find an example of a letter used to appeal property taxes.
Some studies show that over 80% of property tax challenge cases are resolved through informal negotiations. However, just be aware that when the owner informally meets with their assessor, it truly is a negotiation. They may end up with a higher valuation than they would like, but it would still be one that is lower than the assessor's original appraisal,. No matter what a lower assessment will help the homeowner save on their annual property tax bills.
That being said, if you are uncomfortable with this process to challenge a house’s assessed value for any reason, you can always hire a professional property tax consultant or a real estate agent to contest your property taxes. They can take the lead when it comes to challenging an assessment. You should do your best to find someone who will only charge you if they are successful.
The hearing to challenge the assessed value of the home
If the local tax assessor will not meet with the owner (also note that some areas will not permit informal meetings), or if they do meet but still fail to reach a fair agreement, the next step that the owners need to take is to protest the tax assessment. Note this is not always needed. However, if there is a hearing, this is free to do and pays long term “dividends” in the form of a reduction in annual homeowner expenses.
Ask the tax assessor what the procedure is and what the deadlines are to file a protest in a certain town or municipality. The assessor needs to help answer those questions. Or look online at your county website for details on challenging real estate taxes or home values through a hearing. Be sure to follow the guidelines to the letter of the rules to ensure against an appeal is not dismissed due to a technicality.
Before the hearing, gather all of data, stats, and evidence and put it into order. For example, the owner may want to put the market stats and data into a spreadsheet or format that makes it easy for the officials to see the basis of their argument. In addition the homeowner should strongly consider collecting photos of comparable properties and their real taxes/assessment. The presentation doesn't have to be as polished as a top notch lawyer, but being, and showing that the person is organized, will help put on the strongest possible case. It will increase their chance for success. Find out what percent of property tax challenges are successful.
Another idea is to consider sitting in on somebody else's hearing before the appeals date. The hearings are free to attend and public events. By doing this the owner can see how the local board operates. They can also get a sense of what arguments don’t work, and those that do work.
Even if the board doesn't rule in the owner’s favor despite a compelling presentation, they can always take their case to court. Note that in many cases it will cost more in fees and attorney bills than the amount of tax money the client might save. Many states also have a state appeals board where people can state their case if the local panel rejects their petition. It is important to stay professional and composed throughout the process.
Conclusion - It is possible to appeal property taxes
It is possible to contest your property tax assessment, which will lower the amount of your annual real estate taxes. The process is free to do and it only involves you spending a little time doing some research. No one should not be afraid or intimidated to this process. Challenging the assessed value of house, as noted above, is a straightforward process that can result in significant savings on both an annual as well as recurring basis.
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