Our Steps to Disputing Property Tax Assessments

If you own a home, you will owe property taxes. And for most homeowners, property taxes are the second biggest expense after the mortgage. But while paying property taxes may be inevitable, how much you owe may be unclear.

Consider this! The National Taxpayers Union (NTU) reports that between 30 and 60 percent of taxable property in the United States is over-assessed, leading to higher property values. Yet fewer than 5 percent of taxpayers will challenge their tax bill, even though the majority of homeowners who do appeal receive a favorable reduction to their property tax bill that better reflects a more accurate assessment.

How To Calculate Property Tax

As with many tax formulas, calculating your property tax can include both simple math and aggravatingly complicated equations. What may seem as simple as comparing local home market value to an individual home’s appraisal value, can become very complicated once assessment ratios, millage rates, tax credits, exemptions, etc are factored in. That’s why it’s imperative that you work with a local licensed assessor and your tax advisor to ensure your calculations are on point.

There are some online resources, like smartasset.com, that can help give you an idea of what your property taxes might look like based on your city and state. But you will need to work with professionals for a full property tax evaluation.

Property Taxes Vs. The Housing Market

Property taxes don’t immediately track right along with housing prices — increasing or decreasing as a neighborhood’s home values change. Because property tax assessments are typically conducted only every few years, according to the NTU, many homeowners fall victim to their home falling in value based on the real estate market, while their property taxes remain the same.

How to Challenge Your Property Tax Bill

Not every property tax change request is granted. But if you plead a solid case of discrepancies in your current assessment and tax bill, you just might save yourself hundreds, or even thousands, of dollars annually.

Challenging a property tax bill takes a lot of time and effort, so try running the numbers yourself first to see if the potential savings will be worth the work. If you decide it’s time to appeal your property tax bill, here are some steps to follow:

  1. Plan Ahead – Property taxes and the deadline to file an appeal typically happen annually. You can get a head start by visiting your local government’s website to research the property assessments schedule in your area and find out the last time your property was officially assessed. You can also research the property tax policies specific to your area and get the complete instructions and forms for filing an appeal.
  2. Review The Current Assessor’s Report For Accuracy — Property tax assessors record information on a property, such as square footage, property condition, modifications to the property and property features. Sometimes assessors make mistakes, and even a small square-footage miscalculation can overvalue your property and hike up your tax bill.
  3. Gather Market Evidence — Your area’s market value is based on home sale comparisons during the time of the assessment. You may be able to search for this information from the assessor’s site. If not, you can use Zillow to search for recent home sales to build your case. If you find your area’s home sale prices have significantly dropped, then you can request an updated market value assessment by showing proof of current home sales in your neighborhood, that are comparable to your home, at reduced prices.
  4. Highlight Your Home’s Faults — Remember that assessors include property features in their evaluation. Any disrepair on your property and any “negative influences” surrounding your property can impact your property’s assessed value. Qualified negative influences include busy streets, neighboring industrial plants, commercial property bordering your residential, etc. Include your property’s faulty features in your appeal, as they may result in a tax reduction.
  5. Check For Homestead Exemptions & Property Tax Deductions — Many states and cities offer exemptions and deductions that can earn you savings on your property tax bill. A homestead exemption removes a percentage or a fixed dollar amount of a property’s value from taxatio And exemption amounts often change when new proposals pass through local legislature. Some areas also offer exemptions for veterans, widows of veterans and senior citizens. Your area may also offer tax deductions based on your income and school district. Check with your local department of taxation to see what exemptions and deductions might apply to you, as well as how to apply for those benefits.
  6. Make An Official Appeal — You can start your appeal process by making an informal request, via phone or letter, to your official assessor first. You may have to attend an informal hearing that can lead to an immediate reduction, refund or both. If your appeal is not accepted, you can then submit a written, detailed summary of your case to be presented, along with all required documentation, at a formal hearing with an appeals board. Consider hiring a real estate appraiser, who is experienced with your type of property, your area and all property tax laws, to assist you in this process.

While you’re looking into lowering your property tax bill, consider saving even more money by refinancing your home with today’s low interest rates. Contact a PrimeLending mortgage expert today to find out if refinancing makes sense for you.


from the PrimeLending blog by Mandy Jordan