If you own your home, a declining economy may mean a drop in real estate prices. This may not be cause for alarm, if you can afford your mortgage and don't plan to move anytime soon. Don't be surprised if your property taxes don't fall along with your house's value, though. Most localities won't revisit property taxes until the time of a regular assessment. Consider appealing your property taxes to try to lower your bill.
The assessor's office in your local jurisdiction -- usually in the county where your house is located -- determines the amount of your property taxes. Each area has different tax rates and reviews your property's value at various intervals, such as every one, two, three or more years, using comparable sales in your area. Property taxes are normally a percentage of your assessed value. Your total tax bill may include additional required payments due to voter bonds, school districts and community projects, which are fixed amounts and will not change if property values drop. If you have recently paid for a formal appraisal on your residence that reflects a drop in value, it does not necessarily mean that you have grounds to appeal your property taxes. Depending on how your jurisdiction computes your tax basis, a lower value may not translate to a reduction in your bill cautions Joe Light, writing for CNN Money.
If you believe you have a basis for challenging your property taxes, contact the property assessor for your jurisdiction. Refer to your tax bill for the assessor's phone number, address and your property assessment number. Request a reassessment and the forms needed to start the appeal process. If your property tax bill is due before you receive an answer to your appeal, pay it on time to avoid penalties and subsequent liens. Appealing does not relieve you of your responsibility to send payment. The tax assessor may return the amount you overpaid if you are successful in reducing your bill.
Before you submit an appeal form, find property sale prices in your neighborhood within the last year. You can ask a real estate agent who works in your area or search for the information yourself. Steve McLinden of Bankrate.com suggests you check websites specializing in property values, such as Zillow, PropertyShark or Trulia, to supply the sale prices of recently sold homes. Type your address on the site to find properties similar to yours. Features impacting value in your location include the sizes of the house and lot, number of bedrooms and bathrooms, age, condition and major upgrades.
For a successful appeal, you must explain in detail why your taxes should be reduced, such as comparable sales showing real-estate prices have fallen in your area. According to Bloomberg Businessweek, you can also appeal if county records contain errors about your house, such as overstating the size or other features, which would inflate its value. Your jurisdiction might require you to attend a hearing to present your case, or the department may review your request and provide a determination without talking to you. Be prepared for your assessor's office, which can be overburdened with appeals, to take a few months to a couple of years to make a decision about your case. If you disagree with the finding, you may have the option to appeal to a higher authority before you consider court action.
- California State Board of Equalization: Frequently Asked Questions -- General Information
- Bloomberg Businessweek: How to Reduce Your Property Taxes
- County of San Diego: A Guide to Filing Your Assessment Appeal
- Wisconsin Department of Revenue: Property Assessment Appeal Guide for Wisconsin Real Property Owners
- Bankrate.com: Property Value Adjustment
- CNN Money: 7 Ways to Fight Property Taxes
- Spector Foerst & Associates: Property Tax Appeals
- Sacramento Appraisal Blog: How Long Does It Take to Appeal Property Taxes in Sacramento County