How to Appeal Your Property Taxes

Property taxes are one of the principal means that cities and municipalities use to raise revenue. Property taxes are generally based on two things: the value of the property itself, and the local rate of taxation. Both of these values can fluctuate depending on several different factors, including voter approved tax increases, city or state efforts to raise taxation, and the relative health of the real estate market.

How are Property Values Assessed?

The value of a property is usually “assessed” by a professional property assessor. His evaluation of the property sets the corresponding value of the property, and allows for the determination of the total amount of property taxes that are due.

However, depending on when this process was conducted and subsequent changes in the market, the actual value of the property in comparison to the last assessment may not match. For this reason, the process of property taxes appeals can provide significant legal reductions in the total amount of money owed by any given property owner.

Traditionally, the municipality sends out tax notices at the beginning of each year notifying property owners what the amount of their new taxes will be. Due to the recent economic crisis, cities and municipalities across the nation have increased the amount of property taxes they are collecting in order to bolster their shrinking revenue.

This means that many homeowners are currently paying far more in property taxes than they technically owe. Because of the nature of the government’s collection methods, it is the responsibility of the homeowner to verify that he is not being taxed more than his fair share.

Property Tax Appeals Process

To appeal property taxes, a homeowner should hire a professional assessor to survey the property. Each state and county has its own particular assessment methodology: when hiring the assessor, it is in the best interest of the homeowner to ask if that particular assessor subscribes to the methodology used by the city.

This will save time not only in the preparation of documents, but in the appeals process itself. If the assessor discovers that the property is worth less than what it was initially purchased for, the homeowner is entitled to pay less property tax.

Once the paperwork has been completed, the homeowner should take these papers into the city assessor’s office and ask that the rates on the property be lowered. It is vitally important that the paperwork is completed by an official property assessor in order to successfully appeal property taxes.

A flimsy or ill-constructed assessment will not impress city officials, who have everything to gain and nothing to lose by finding small flaws or bureaucratic inaccuracies that would potentially invalidate the legitimacy of the paperwork. By investing significant amounts of time in the preparation of an irrefutable claim to lowered property value, a property owner will ultimately save himself enormous amounts of stress.

Property taxes appeals can take anywhere from between 45 to 60 days, depending on the process of the individual municipality. Usually, the paperwork is submitted to the County Appraiser, who must then weigh the evidence in a series of fact finding hearings.

To find out precisely how long this process will take, research the policy of the local County Appraiser. At the end of this period of time, the municipality must issue a decision on the validity of property tax appeals. The decision will be reflected in the next year’s tax notice.

Living frugally is often a matter of being vigilant about paying for exactly what is owed, and not being accidentally or purposefully overcharged. By taking careful steps to ensure that everything, including the value of something as significant as a home or other piece of property has been properly calculated, enormous amounts of money can be saved.

Comments

  1. Before you go to the expense of an appraiser, check to see that that is necessary in your county. Ours does NOT suggest it nor require it. What we have to do is just show 3 or 4 recent sales on comparable houses. This can be done by asking your fav realtor to pull up recent sales, by going to the courthouse and checking sales, or online even, by either checking out the new tax statements for recent sales, or going to a site like zillow.com which will show sales in your area for the past year or two.

    Print those out, do a comparison spreadsheet or graph, sq. ft, age, rooms, etc. Write up a short descriptive narrative to go with it, keeping emotions out of it. MAKE SURE you get it all in by the deadline, which is within a month of the tax statements for us. If you can show that similar homes are selling for less, here it is an easy win.

    Luckily in our area, 3% is the limit of increases per year on the property tax itself, but then there are those bond levies….

    Check out YOUR area and YOUR specific instructions. You might not have to hire the appraisal after all – or you could save it for the appeal. However, at $400 for an appraisal (here) it would not be worth it at all to me!

  2. I am more interested in how to sue the municipality for screwing you over than how to appeal the tax. Here’s my story:

    1. Bought the house in October 2009 @ $111k with $8k rebate from the IRS = Net purchase price of $103k

    2. Forced to pay taxes on a value of $126k and was told I could not appeal because the appeals process ends in April 2009 (which was before I bought the property).

    3. Property was re-assessed as of 1/1/2010 at $115k…still over the amount I paid. So, I appealed this value. My appeal was rejected on the basis that the city assesor’s computerzied/calculated estimate was more accurate than my arm’s length transaction in October 2009…less than 3 months earlier.

    4. Talked to a lawyer, but the tax overcharge of $240/year is not worth the cost of legal fees.

  3. We had to fight this and it was even before the recession. In our county a building “lot” was assessed the same amount whether it was 1/2 acre, 1 acre or 5 acres. And since most plots on our end of the county are now 5 acres, a building lot was valued at $29K, which then increased our value by an extra 20K as we only have an acre, and there is no way it is worth $29K. Hubby fought it and won, and we didn’t even have to hire an assessor, this saved us over $200 a year in taxes.
    Bernice
    http://livingthebalancedlife.com/2010/christmas-2010-what-worked-what-didnt/

  4. Government is no different that a customer service department. You explain your problem and if they reject it you ask for a supervisor until someone says yes. It takes a lot of time, but you can succeed. Make sure you are armed with the law, and your facts. Good luck.

  5. I am one of the unlucky ones that was paying more for my property taxes that was actually appraised for. I went through the entire process of filing papers about the dispute and the process took a long time. The process did work however I believe something needs to be done in shortening the evaluation process.

  6. My situation is sort of like Tommy Z’s. The county did a county wide re-assessment and our house was over assessed; they said it was worth $240,000. I appealed it and they reduced it to $225,000. Two years later, we re-financed and the bank had an appraiser come out who stated based on other sales in the area that the house was only worth $199,000. I brought that proof before the town board and stated my case and failed. I plan on appealing again this year and getting a lot more information. There is no way someone would purchase my house for $225,000. and pay the taxes that we pay in this state.

  7. I’m afraid my parents are eventually going to need to do this. They live in an area where the farmland around theirs sells for the price per acre one would get for farming or grazing land, but their land is almost all steep and wooded, mostly only good for hunting. So the appraisal has been creeping up over the years, as farmland around them sells and continues to “prove” what the price per acre is in the neighborhood. Eventually, they’re going to need to get an appraiser out there, point to the steep, rocky hillside, and say: really? this is worth what those rolling fields down the road are worth?

  8. @Pete L

    Wouldn’t rolling and wooded land be worth more than non-wooded flat land in a sense that it is more scenic and has more value for a home owner (although less value for a farmer)?

    The timber on the land is probably worth something too.

  9. Tommy, if your assessment is only $4k high (3-4%) then you should count yourself lucky. Theres many people out there with assessments that are 10-50% higher than they should be.

    “steep rocky hillside” is not good at all for building houses on. Trees are worth something for the lumber value of course. But steep and rocky makes it worth much less than gently rolling or flat.

    • we live in streamwood ill and i need to know what the house is really asset at we paid almost 6000 dollars for taxes and i need to know how to appeal them

  10. We challenged our property tax appraisal after doing a refinance – and having a professional appraisal done for that. I’ve linked an article I wrote about it in my name above.

    In our county they have a one time phone appeal if you can supply proof of the home’s value – which we did. By making one phone call we had our home’s taxable value reduced by $20,000 – a savings of 13.8% on our tax bill. My suggestion is to know what your county requires to do an appeal, do your homework, and go for it! The worst they can do is turn you down.

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