A record number of homeowners across the country are challenging their property tax bills and appealing their home assessments. A large percentage are having success with it. One indication of their success rate is that local governments are experiencing a drain on their budgets.
The property tax challenges are being filed in record numbers, from all types of homeowners all across the country. Owners of $10 million estates are taking actions, as are owners of one-bedroom bungalows. Families taking this step range from residents of the high-tax enclaves surrounding or in Los Angeles and New York City, from taxpayers in the Midwest, and states like Florida, Arizona, and California. Across the nation people are challenging their property taxes and are having success.
The facts show that many homes are overassessed and people are paying too much in property taxes. A big reason is that home prices in most parts of the country are still below their peak prices. In a recent survey conducted by the National Association of Counties, almost 80 percent of large counties across the nation have said that falling property tax revenue, mostly as a result of falling property values, was significantly affecting their local budgets. Government officials in some states across the country say that their property tax revenue is falling for the first time since World War II, once again partly as a result of people fighting their property values.
What is now unfortunately happening is that approximately about 10 percent of large counties are raising the property tax rates that are associated with home values to minimize the revenue loss from people challenging their assessments, the county association said.
The revenue losses are coming as homeowners prod towns for new assessments and as municipalities conduct regular reevaluations of their real estate. However even if your local town or county raises the rate, you can still appeal the valuation of your home.
There is no standard formula to determine property taxes. The process is different in almost every town or county, even those within the same state. Property taxes are determined by a disparate patchwork of local governments including cities, towns, school and local fire districts, and counties, all with their own rules. Mostly due to the fact that property tax formulas vary widely in how they are calculated from county to county, not every decrease in home assessed values will automatically lower a household's annual property taxes.
However, government officials and assessors across the nation say that there is no question that the number of home appeals and property tax challenges has risen from the usual trickle to a flood now. There seems to be no letdown in them and the number of appeals keeps increasing.
As just a few examples, in suburban Atlanta, thousands of people have gone to their local government offices to file their requests for property value reassessments before a March 31 deadline. Also, in sections of Ohio, property tax appeals and challenges have multiplied fivefold. Tax lawyers and assessors in the northern suburbs of New York have never been so busy with real estate work, and some cities and towns have hired extra employees to sift through the paperwork being filed.
Many of the challenges and calls for towns and counties to acknowledge the falling price of homes is loudest in those states where real estate taxes are highest, or those states in which the housing crisis has hit the hardest.
Other examples of the increasing number of appeals includes New Jersey, which has the nation's highest property tax values, and it has been almost overwhelmed by tax appeals. One homeowner whose home in Bound Brook is assessed at almost $1.8 million, but can’t be sold and is languishing on the real estate market with an asking price of $1.3 million. She is a prime candidate to appeal her home value.
Throughout California, including areas near Los Angeles, there is an example of a homeowner challenging the assessed value of her home. Her two-bedroom home is located in a community for older residents and is assessed for as much as $280,000 three years ago. However, houses on her block are now selling for less than $100,000, so her home is overvalued by as much as $180,000.
Local assessors and property appraisers, who are normally concerned with comparable sales and land values, are becoming extremely busy as property tax appeals are 10 times as high as they are normally. Some assessors are saying that most people are going to see a significant decline in their tax bill, if they just ask.
In Contra Costa California, the county has now reduced the recorded property value of more than a third of the 350,000 privately owned properties in the county due to the housing crisis.
So the bottom line is do not hesitate to take this step on appealing your property taxes. Tens of thousands of other homeowners across the nation are doing so and are in fact saving money.
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