You have a legal duty to pay your property taxes, but you don’t have to pay more than your fair share. Local governments periodically assess the properties under their administration and assign a value to each home for taxation purposes. If the county gets it wrong, the assessed value of your home could be far higher than the amount you could sell it for -- which means you’re likely paying too much tax. Sometimes, homeowners can trim their tax bill by appealing the assessed value of their homes.
Base Your Appeal on a Mistake
Assessments are not the same as appraisals. Local governments do not routinely inspect the features of each home. Usually, they apply local market pricing trends to your previous assessed value. The government office holds information about your property, which it uses to determine the correct market multiplier. For example, your home's lot size, its number of bedrooms, and whether it has a garage influences its assessed value. If the assessor gets this wrong -- believing that you have 2.0 acres of land, for example, when you have only 0.2 -- you have the basis for a quick and easy appeal.
Base Your Appeal on the Market
Appeals can raise or lower your tax bill. Before you mount a challenge, make sure your home’s market value is lower than its assessed value. Ask a real estate agent to find “comps," which are the recent sale prices of properties similar to your own in terms of size, facilities, condition and location. If the comps show a serious discrepancy between the sale prices of similar homes and the appraised value of your home -- and the potential tax savings are high -- hire a professional appraiser. Expect to pay between $250 and $600, depending on the location and size of your home. If the appraisal comes in lower than your home's assessed value, include it in the appeal pack you mail to the tax appeals office.
Base Your Appeal on the Neighbors
Check the tax assessments on your comps. If they are lower than yours, you can argue that your assessment is too high. If the local government doesn’t make this information public, do a little sleuthing. See if your real estate agent knows anything about the tax assessments of similar homes, or ask the homeowners themselves. If their assessments are similar, look for features that distinguish your home from the comps. For example, if you can show that your property has a leaking roof, unconverted basement or storm damage -- while the comps are in good condition -- you can make a case for a lower assessment based on the condition of the homes.
Present Your Case
You’ll only have a short amount of time to challenge the assessment -- typically within 10 to 30 days of receiving your assessment letter. The appeal procedures are outlined on the back of the letter or online, and are typically straightforward. There’s probably a form to fill out and details of where to send your supporting evidence. Usually, you mail in your appeal and the tax appeals office mails back its decision. If you’re unsuccessful, you may have the chance to appear in person before an independent appeal board.
Bring in the Professionals
If this all sounds like too much work, hire a property tax consultant to do the heavy lifting for you. These consultants know the ins and outs of the system and usually can tell you quickly whether you have a case. Expect to pay a fixed upfront fee for a tax-assessment review to determine whether the consultant will take on your appeal. After that, fees typically work on a contingency basis, which aligns your fees to your tax savings. Commission percentages usually fall in the 15 percent to 30 percent range.
A former real estate lawyer, Jayne Thompson writes about law, business and corporate communications, drawing on 17 years’ experience in the legal sector. She holds a Bachelor of Laws from the University of Birmingham and a Masters in International Law from the University of East London.