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How To Appeal A Property Tax Assessment

couple learning how to appeal property tax assessment
Learn how to review your property taxes, and you may find some errors that could allow you to appeal and pay a lower tax rate.

Income taxes aren’t the only taxes raising eyebrows this time of year. Property tax bills are also hitting mailboxes across the country. And while real estate prices remain relatively steady nationwide, many local tax bills are on their way up — and it’s not easy to predict when your condo in Orlando, FL, or real estate in Chicago, IL, will be subject to higher taxes.

While it’s easy to simply grumble and pay up, you might see a significant tax reduction by learning how to review your property taxes (and, potentially, how to appeal your property tax assessment).

1. Take a closer look at your property tax bill. The amount due is usually what grabs your attention, but that’s not necessarily the most important number on your bill. Pay attention to the rate of taxation and the assessed value of your home (which may be determined by a formula). These are the numbers that determine your total tax bill. Triple-check the rate of taxation and assessed value to make sure they are correct — both can be confirmed by calling your city or county assessor’s office.

2. Confirm that your tax assessment is up to date. Tax assessments don’t necessarily keep up with market value. In some cases, property tax assessments may be updated only every few years. If property values have dipped significantly in your area and assessments haven’t changed, you may want to request a reassessment.

3. Check for errors. Criteria for assessments vary according to locality but are generally tied to fair market value. That fair market value is based not on a walk-through of your home, as a real estate agent might do, but on a list of attributes plugged into an automated valuation formula. Make sure that information is correct for your property: You can ask your assessor’s office for a detailed checklist if it’s not readily available. Particulars you’ll want to check include square footage (for both your house and your land) as well as the number of rooms and outbuildings, like a garage or in-law suite. You’ll also want to confirm your property type (commercial, residential, or mixed).

4. Find out how your local government assesses property. Understanding how assessments work in your area is key. This includes not only how often assessments are performed but also how values are determined. Some properties are assessed based on recent sales, while others may be assessed based on replacement value (the property’s worth as determined by an insurance company for coverage purposes). Understand what the process for valuation is so that you can make your argument accordingly.

5. Compare similar properties. It’s helpful to investigate the assessed value of similar properties. This is easily accomplished by checking local records and sales of homes in your area (start your research on Trulia!). Look for patterns, talk to your neighbors, and consistently follow up on home sales in your neighborhood. If you find that your assessed value is considerably higher than that of at least three to five comparable homes in your area, an appeal might make sense.

6. Check eligible tax exemptions or credits. As you do your research, be sure to check out whether you might qualify for a homestead exemption or other tax credit. These tax breaks might lower your tax bill — even if your assessment accurately valued your home.

7. Look for available freezes and discounts. Even if your home isn’t eligible for an exemption or credit based on its value, you may be eligible for a tax break. Many localities offer property tax freezes or discounts for seniors, veterans, and disabled individuals, no matter the value of your home.

If, after doing your homework, you think a lower assessed value is in order, take the following steps to request a property tax reassessment.

1. Prepare your appeal. Generally, the rules for appealing your property assessment (including the filing deadline and the specific procedures) are included with your assessment letter. If not, that information can be found on the assessor’s website. In most cases, you’ll present your argument (such as comparable properties) for review by letter or online, and a review board will determine whether a reassessment is appropriate.

2. Consult the pros. If you’re not sure your evidence is sufficient, or if you don’t know how to best make your argument, consider hiring a tax or real estate professional with expertise in the subject. While the fee might take a bite out of any tax savings initially, a lower assessment should stick with you for a few years, which might make the expense worth the cost.

3. Appeal your appeal. No, that’s not a misprint — you might want to appeal your appeal. If at first you don’t succeed, consider trying again next year. Alternatively, if you want to escalate the matter, you can appeal a denial to the next level, usually a state board or court. Keep in mind that in addition to your precious time, appeals may require fees or court costs.

Also bear in mind: If you ask for a reassessment, remember that you must still pay your property taxes while any action is pending: You don’t get a free pass on your taxes during an appeal. However, if you win, you will receive a refund for any overpayment. And don’t forget that while a request for a reassessment could produce a better result, there’s also the possibility (though statistically less likely) that you could be charged with a higher assessment. So don’t skip ahead to appealing your property tax assessment without doing your homework first!

How have you appealed your property tax assessment? Let us know your tips for success in the comments below!