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If your latest property tax bill has left you reeling – or at least scratching your head – consider that the asking price, to be negotiated downward.

Swings in the real estate market may mean that the current taxable value on your property is inaccurate.  In fact, according to the National Tax Payers Union, up to 60 percent of homes are overvalued.  The more startling statistic?  Fewer than 5 percent of taxpayers appeal. 

While there’s nothing you can do about the tax rate – which is set by local governments – you can appeal the taxable assessment of your property.  If you think that the taxes you’re currently paying on your property are no longer in line with how much the property is worth, there are a few steps you can take.

Verify the Information

The first step is to review your tax bill for errors.  The worksheet for the property, also known as the property record card or working papers, contains specific information about your home, such as square footage, number of bedrooms, etc.  Verify that all of the information on the sheet is correct. 

If you spot an error, a phone call or quick visit to your assessor’s office may be all that is required.  If the bill seems accurate (aside from the assessed value), you may need to do more digging. 

Assessors usually rely on external views of the home to make their assessments, so it may be worthwhile to double-check the numbers and do the math yourself.  You may also choose to enlist the services of a state-licensed real estate appraiser to do an inspection of the property, usually for around $300 to $400.

You might also be entitled to certain tax deductions.  Homestead exemptions, for example, may provide some relief from property taxes.  The exemptions vary from state to state, so check with yours to make sure you qualify and, if so, if the exemptions have been applied to your property.

Know the Process

If you’re unable to find any errors that might result in a higher tax bill, you may want to consider initiating the appeal process.  Before you begin, however, make sure you understand how the process itself works.  The rules are different for every taxing jurisdiction, so you’ll need to check the requirements for your area.

Localities often only accept appeals within a narrow timeframe each year, often in a specific amount of time after property tax bills or reassessment notices are released.  You may also have a window to appeal upon purchase of a property.  If you’ve already missed the deadline for the year, you can use the time to prepare for the following year.

If you’re feeling particularly ambitious, you can also attend an appeals board meeting so you know exactly what to expect should you decide to proceed with an appeal.

Appeal Property Tax AssessmentCompare Properties

You will of course want to research the values of comparable properties in your area (the National Tax Payers Union suggests looking at a minimum of five).  Still, that information may not paint the entire picture of what your home is worth. 

Remember that whoever assessed your property may not be aware of what lies inside, but you do.  This is the time to be deeply critical of your property.  Anything that may reduce or detract from its value should be noted.  (Warning: be careful to never alert the local government of any code violations, or repairs made without a permit.)

Also consider factors outside of your property that might bring the value down, such as living on a busy street or near a railroad track.  They might also help you make your case in an appeal. 

Make your Case

Before you take the step to appear before an appeals board, you may want to request an informal meeting with a representative from the tax assessor’s office.  You may also be requested to make your informal appeal in writing.  This would be a good time to share any discrepancies you have found with the assessment worksheet for your property, as well as the other information you’ve been able to gather about your property’s value. 

If an informal appeal doesn’t yield the results you were hoping for, you can take your case to your local appeals board.  Again, the guidelines governing the process will vary depending upon locality, but this will be your opportunity to present any evidence that supports lowering the value of your home. 

If you haven’t yet attended an appeals board meeting, you should do so before you’re scheduled to appear.  Bring all supporting documentation you can think of, including recently sold comparable home listings, market data and photographs to help support your claim.

If your appeal is rejected, you may be able to take your case to your state appeals board.  Or you can consider hiring legal help.  However, consider how much you’ll spend on legal representation and how much you stand to gain from reducing your property taxes – you may find that fighting any further simply doesn’t pay.

Related Reading:

Tips and Tricks to Lower Real Estate Property Taxes

The Growing Specter of State “Exit Taxes” as Residents Abandon High-Tax States

The Best & Worst States for Real Estate Taxes

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Categories: Tax Strategies

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