Did you know it's possible to lower your property tax through property tax appeals—challenging the value the tax assessor assigned to your home? That "assessed value" calculates how much tax you owe.
One way to lower your property tax is to show that your home is worth less than its assessed value. You can do the initial research online or by calling your real estate agent.
What Is a Property Tax Appeal?
If you own property, you should receive a property tax bill. A property tax assessor typically determines property tax rates in a mass assessment. This means your new property tax bill may need to accurately reflect the value of your home or property. So, you have the right to appeal the assessed value of your property, which could reduce the amount of your property tax bill.
Reasons to Appeal Property Tax Assessment
There are a few common reasons to appeal a property tax assessment, like:
A change of ownership or control has occurred.
Recent local sales are less than the estimate.
Information on the assessment needs to be corrected.
Can Appealing Property Taxes Lower My Tax Bill?
In some cases, appealing your taxes can reduce your tax bills. For example, suppose a comparable house in your neighborhood recently sold for less than the property value assessment. In that case, a property tax appeal could lead to a revised evaluation and lower your property taxes.
But if you appeal your tax property valuation and the property's value has gone up since the last assessment because you made improvements, for example, an appeal might lead to an increase in your property tax bill.
How to Appeal Property Tax Assessment Step by Step
Read Your Property Tax Assessment Letter
Local governments periodically assess all the real estate they tax. When your new assessment comes in the mail, it'll list information about your property, such as lot size or a legal description, and the assessed value of your house and land.
Your property tax bill will usually be calculated by multiplying your home's assessed value by the local tax rate, which can vary from town to town.
If you think your home's assessment is higher than it should be, challenge it immediately. You generally have fewer than 30 days to do so, though each taxing authority sets its timeline. The back of the letter often outlines the procedures.
Decide If a Property Tax Appeal Is Worth Your Time
How much effort you decide to put into a challenge depends on the stakes. Likewise, the decision to appeal property taxes may rely on how much you stand to save.
Check the Data on Your Assessment
Make sure the information about your home is correct. Is the number of bathrooms accurate? The number of fireplaces? How about the size of the lot? There's a big difference between 0.3 acres and 3.0 acres. If any facts need to be corrected, you may have a quick and easy property tax appeal.
Get the Comps in Your Neighborhood
Ask a real estate agent to find three to five recently sold comparable properties—or comps in real estate jargon. Alternatively, check a website like realtor.com® to find approximate values of comparable properties similar to yours in size, style, condition, and location. If you're willing to shell out $375 to $450, you can hire an appraiser to give you a professional opinion of your home's value.
Once you identify comps, check the assessments on those properties. Most local governments maintain public databases. Suppose yours doesn't seek help from a real estate agent or ask neighbors to share tax information. If the assessments on your comps are lower, you can argue yours is too high.
Even if the assessments are similar, if you can show that the comparable properties are superior to yours, you may have a case for relief based on equity. This situation could happen, for example, if your neighbor built an addition while you were still struggling to clean up storm damage. In that case, the properties would no longer be comparable.
Present Your Case to the Local Property Assessor
Armed with your research, call your local assessor's office. Most assessors are willing to discuss your assessment informally by phone. If you still need to, you can request a formal review if the explanation doesn't satisfy you.
Pay attention to deadlines and procedures. There's probably a property tax appeal form to fill out and specific instructions for providing supporting evidence. The length of the review process depends on your municipality, but a final decision might take a few months — or sometimes longer. Expect to receive a decision in writing.
Appeal If You Don't Like the Review
If the review is unsuccessful, you can usually appeal the decision to an independent board, with or without a lawyer's help. If you end up before an appeals board, your challenge could last as long as a year, especially in large jurisdictions with many appeals. You may have to pay a modest filing fee.
As you weigh an appeal, keep these factors in mind:
The appeals board can lower only your real estate assessment, not your tax rate.
Your assessment could be raised, even though the chance is slight. As a result, your property tax would increase.
A reduction in your assessment right before you put your house on the market could hurt the sale price.
An easier route to savings might be to determine if you qualify for a property tax exemption based on age, disability, military service, or other factors.
Source: HouseLogic
Whether buying, selling, or seeking valuable insights into the market, I'm here to be your trusted guide in the dynamic world of real estate. Feel free to contact me for a confidential discussion, where we can explore your goals, address any questions, and navigate the exciting path of real estate together. Your real estate journey is unique, and I am committed to providing personalized assistance tailored to your needs. Don't hesitate to connect; your next real estate adventure awaits!
Dani
734-623-9442
dani@danihallsell.com
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