How to go through the process of having your property taxes reassessed by reviewing your home value assessment.
The bad news is that your home value is lower, the good news is that you can save money by getting property tax relief by challenging outdated assessments. Tax assessment appeals are up considerably as a result of the decline in the market. Nationally, home prices dropped 4.1% in July, compared with a year ago, and they are down about 31% since their peak, according to the S&P/Case-Shiller index.
Every though average home prices are still falling nationally, they’re not dropping everywhere. In this case you should be cautious since if you challenge a tax assessment and they determine that the assessment is too low, you may end up raising your tax liability. Before housing values started falling, an outdated assessment usually was to a homeowner’s benefit because assessments lagged behind housing prices. Depending on your market you may missed the lowest point of home values as they are starting a new upswing.
Below are several tips for homeowners interested in appealing an assessment. Keep in mind that jurisdictions vary in the way they handle assessment appeals, so always contact your local assessor first so you know what the process is in your area.
First check with the local assessor’s office to determine the deadline for filing your appeal. The filing dates are different throughout the country. If you miss the date, you lose your right to appeal that year.
2. Tax Assessment System
Taxing authorities use different methods to calculate home values. Some look at recent sales of similar homes. In rural areas where sales are few, they might estimate the cost to rebuild. Others use some combination of methods. In some areas your tax liability is based on a percentage of your property's estimated value. It is always best to call your assessor's office to determine how property values are set.
Visit the tax assessor’s office and ask for the evidence used to value your home. Get your home's property card, which lists basic details like lot size, square footage and number of bathrooms.
4. Property Description
When municipalities reassess property values, they usually hire an outside contractor who looks at hundreds or thousands of homes in a tight time period. The appraiser has to come up with shortcuts like three vent stacks on the roof equals three full baths or dormers on the roof means there is an additional bedroom.
The assessor's file should contain a worksheet that the appraiser filled out during inspection with addresses of homes he compared with yours. Many times if you have not upgraded your kitchen and baths, or you have not built an addition, your property may not be comparable to recent home sales in your area where lenders have actually walked into the home.
Look for obvious errors such as number of bathrooms, bedrooms, age, and square footage.
5. Determine Estimated Value
Find out what your home is worth by searching for the values of comparable homes that have sold recently. You can start your search with a site like Zillow.com to get a ballpark estimate of value based on recent sales. As you go deeper into the process you may need to work with an accredited appraiser especially if you have to go before a review board.
Comparisons of assessed values to your neighbors usually doesn’t mean anything to the assessor. Determining that your neighbor’s home is under-assessed doesn’t mean you’re over-assessed.
Also note that in many parts of the country, assessments are based on a percentage of the value of your property.
6. Use a Low Key Approach
Someone from the office can often walk homeowners through the process of contesting an assessment. Sometimes homeowners never have to go before an actual board of review during the process of appealing and you can get a resolution by working with the assessor’s office.
Try to arrange a meeting with the assessor to go over the evidence you found in support of a lower value. This meeting might be hard to arrange in larger towns. If the assessor more or less agrees with you, the rest of the process will be a lot faster and smoother.
Be respectful and don’t try to show up the taxing authority.
7. Filing an Appeal
Usually this is with a county board. Hand deliver your appeal and get a receipt or use certified mail. You should get a notice acknowledging receipt in a few weeks, but depending on your county's size, there may be a long wait.
Most appeals are heard over the course of a couple of weeks. Before your day arrives, attend a hearing to get accustomed to the proceedings. Certain board members might raise the same objections all the time so you can be prepared with the appropriate answers.
Prepare your presentation and use photos of your home and comparable homes. Rehearse your presentation and keep it to eight minutes or less. Keep it short and to the point, don’t misrepresent the facts.
8. Hire a Consultant
Some people will advise homeowners to hire an attorney to help them make their case. That may be a good idea if the process requires you to go before a board of review or if you simply feel overwhelmed or don’t have time for the task yourself.
If you do hire help, make sure their payment is contingent on you receiving tax relief. Many times, payment will be a percentage of the homeowner’s tax savings over a period of years.
9. Filing an Appeal
If you happen to lose your reassessment, you can usually file an appeal to a state agency. If that fails, you'll probably have to go to court. At this stage of the game you'll need help from a lawyer and probably an appraiser. You can retain a lawyer for a contingency fee that varies based on your potential tax relief. An independent appraisal will cost around $400 to $500.
The state does not want to waste a lot of time with tax assessment appeals so they will often offer a deal before going to court in most cases.