As first time homeowners who purchased a recently flipped house, I knew that our property tax would go up someday. But I didn’t expect that less than a year into our home we’d get a postcard stating our assessed value for 2015 was going up 75%! The most confusing part is that the county valued our home nearly $55,000 higher than the price we had just paid for it (and that it had been appraised for) several months before. A quick math check showed me that based on local tax rates, even if we were able to appeal the assessment down to the price we paid, we will save about $600 a year in property taxes.
Though home values and county tax rates vary wildly, if you’ve recently had your home assessed for a value that seems too high, you may be able to save hundreds or thousands by appealing your property tax assessment.
A general guide to appeal property taxes:
1. First, check your assessment for errors. A breakdown of your tax assessment should be availably publicly on your county assessor’s website just by typing in your address. If a detail such as the number of bedrooms, or square footage, is incorrect, you should be able to have your taxes corrected by ing the county directly rather than filing a formal appeal.
2. Find out if you have become eligible for tax breaks, by searching the county assessor’s website or calling directly. If you have become disabled, are a senior citizen, or have had a significant reduction in income, you may be eligible for an exemption or automatic discount.
3. Mark all deadlines on your calendar. You may be able to find the appeal deadline on the assessment mailing you received, otherwise call the county immediately to make sure you don’t miss your chance. In our county, we have 60 days from the date of mailing printed on our assessment postcard to submit an appeal. Also make note of the appeal process (via web, mail-in, or in person) to ensure you follow all requirements to the letter.
4. Find out how assessments are made. Our county states that assessed value is based on comparable home sales in the area. Some counties may use a “replacement value” model. This information will help you prepare your appeal with relevant, accurate information.
5. Research. Once you know how assessments are made, you need to use research to come up with an accurate alternate value. That may mean looking up comparable property assessments in your area, current recent home sales, real estate trends, construction trends that influence replacement value, etc. For example, our county assessor’s website allows us to search for comparable properties in the area and see their assessed values. It appears many other properties are being over-assessed based on current comparable “sales” values, so instead of comparing our assessment to other assessments, I will need to use recent sales data from a real estate website (as well as our very recent appraisal) as data to back up my claim that our home is over-assessed. Make sure that you are using actual “comparable” homes (number of bedrooms, square footage, lot size, condition, location, etc).
6. Think about “extras.” Make a comprehensive list of any additional reasons that you feel your home may be currently over-assessed. Do you have deferred maintenance or repairs that lower its true value? Is it missing features that show up in “comparable” homes the county showed you (i.e. an attached garage, usable lot space)? Does it have a blocked view or is it located on a busy street? Within reason, anything that would legitimately lower the sale value of your house (particularly things you don’t have immediate control over) could be fair game to mention in an appeal.
7. Write a compelling, fact-based appeal using recent data. You will likely need to suggest a value that you feel is more appropriate, rather than just saying “I think this is too high.” You may need to calm down or take a step back to see your appeal objectively. Remember, writing a sob story, or listing things that are not relevant to the actual assessment (how much higher taxes are than they used to be, disapproval of how county spends tax money, how you have two children in college) are not appropriate at this step and may do more harm than good. Use concrete numbers from your research. You may want to have a neutral third party look it over if this process is new to you.
8. Confirm your appeal was received and ask when you should expect to hear back. Mark your calendar to follow up with the county if you don’t hear back when within the timeframe they have set. Don’t forget or neglect to pay your property taxes if they come due (even at the higher rate)! If your appeal is successful, you will get a refund or credit, but you don’t want to have to pay a penalty for underpayment.
9. Ask about re-appeal process if your appeal is denied and you still feel strongly (and have concrete numbers to suggest) that the assessment is too high.
There are services available that claim to help you objectively determine if your property is overvalued and assist you in your appeal (for a fee). One such website, ValueAppeal, claims to save homeowners an average of $1340 per year (which sounds high, and may include some customers in expensive homes pulling up the average), but they claim to be able to tell you within 10 minutes (for free) if your home is over-assessed, and then you can opt to purchase materials to assist your appeal. You may be likely to have your address sold to mailing lists for trying their free service, but that may be worth it for you if the process is feeling daunting on its own.