Learn how to appeal your property tax assessment.
While American homeowners spend, on average, $2,089 for property taxes each year, the National Taxpayers Union (NTU) says between 30 and 60 percent of homes are assessed at a higher rate than they’re actually worth.
Yet, the NTU says only 5 percent of Americans appeal their property tax assessment each year, even though the majority who do win some kind of concession. One reason could be that homeowners may not know they’re able to appeal, let alone know what the process entails. You’ll want to check your county’s website for exact details, but the following 9 steps may help you find out if you have a case — and also assist you in understanding the general appeal process:
- Know the basics: Two things determine property taxes says CNBC.com — the assessed value of your home and the property tax rate for your town or county. Your county assessor calculates the fair market value of your home (sometimes annually, but it varies) — which essentially is what someone would pay to buy it. However, assessors typically use a mass appraisal process to value a wide group of homes — and in doing so, may overvalue some properties. If your home is assigned a higher value than you’d actually get for selling it, you may be overpaying for your property taxes.
- Do your due diligence: To determine whether or not you have a chance of filing a successful property tax appeal, first ask your local assessor’s office for your property tax record, which lists your home’s square footage, garage space and other amenities. Check for any errors, such as the wrong number of rooms or property acreage, which could have affected your assessment total — and often mean you have a good shot at an adjustment. Kiplinger also recommends finding out how your local government calculates property assessments, and double-checking the math. Of course, there is always the possibility that your taxes could be raised if, for example, there were improvements on your home that hadn’t been recorded.
- Confirm your comps: Ask a real estate agent to provide prices for several comparably sized properties (also known as comps) in your area that have sold recently. (You can do some research online, too, but an agent may have more recent, accurate information.) If you’re willing to hire a professional appraiser, you can get an even better idea of what your property is worth. Expect to pay $300–$400, according to the National Association of Realtors®. If your home’s value, based on local prices and any errors you’ve found on your property assessment, seems way off from what your county assessor thinks it is, you may want to file an appeal.
- Determine if you qualify for any exemptions: Check to see if your state offers a veteran, disability, senior citizen or homestead exemption, which CBS News says can lower your home’s assessed value. Find out if you qualify and apply for the exemption via your town’s or county’s website or through your local tax assessor’s office.
- DIY or hire an expert: You can challenge your property assessment on your own, or hire an attorney to file an appeal. Your local government’s website should have information about the process, if you want to go the DIY route. Many property tax lawyers, according to the American Property Tax Counsel, are willing to work on a contingency-fee basis, only getting paid if your appeal is successful. For attorneys who charge hourly fees, Lawyers.comTM estimates you’ll pay $100 to $200 an hour for attorneys in rural regions and $200 to $400 in major metropolitan areas. Whether you hire someone or challenge your property assessment yourself, you’ll need to gather all the evidence you can, including similar home sales, repair information, photographs and other items.
- Ace the property tax appeal process: If you can’t get your local assessor’s office to agree to an informal meeting, file a formal appeal in the format your municipality prefers — usually, according to Zillow, it’s sent in writing, along with your comps and other information. To prove your home isn’t worth as much as your local government has estimated, Credit.com recommends snapping a few photos of items you’d need to repair before selling it, such as cracked walls or leaky areas of your roof. Check the costs of those repairs on sites like HomeAdvisor, and then subtract those costs from your assessed value to arrive at a more realistic total of what your house is worth.
- Don’t delay: File to challenge your property assessment as quickly as you can, because local governments typically require homeowners to let them know they plan to appeal within 30 to 120 days of receiving their assessment, according to ABC News. Deliver your information in person and get it stamped or send it via certified mail so the date is on record. You’ll typically get a decision in two to four weeks, according to Zillow.
- Pay up: You’ll still need to pay your property tax bill on time, if a settlement hasn’t been reached, or you may be charged penalties or have a lien placed on your home — but you’ll get a refund if it’s eventually approved, according to Kiplinger. If your mortgage company pays your bill, make sure it has paid the bill on time and credited the refund, after it’s received.
- Appeal again: If your assessment isn’t adjusted (or isn’t adjusted much), you can ask an independent appeals board to review the situation, and potentially present your case in person. The cost isn’t too high — filing fees are usually $10 to $25, according to HouseLogic — but the process can take up to a year. If the appeals board doesn’t agree with you, your next option would be to take your case to a state board, and if that fails, you can consider a judicial hearing, according to Kiplinger — although lawyer and court fees will likely be higher than any adjustment you’d receive.