The Great Property Tax Dilemma

tax.jpgMost people cannot believe that even though their property values have gone down over the last couple of years, their property taxes have stayed the same or gone up. In fact, property taxes have risen more than twice the rate of inflation this decade. What can you do? Appeal your taxes. Fewer than one in fifty homeowners do, even though 60% of properties are overvalued right now according to the National Taxpayers Association. Depending on how far you are forced to make an appeal, expect to spend from 5 to 20 hours on it.If you are going to appeal your property taxes, here is what to do:

1. Learn the system. Different taxing authorities use different methods to calculate your home’s value. Some look at recent sales of similar homes. Some look at costs to rebuild. Others use a combination of methods. Call your assessor’s office and ask how it pegs value.

2. Get your assessor’s evidence. Ask for the evidence the assessor used to value your home. Get the home’s property card, which lists basic details like the number of bedrooms, lot size, and square footage. Are these even correct? When the assessor revalues property every few years, they usually hire an outside consultant who looks at thousands of homes in a very short period of time. The assessor’s file should contain a worksheet that the consultant filled out during the inspection with addresses of homes he compared with yours. Are those properties a good match??

3. Build your case. Since you only have 60 days or less from the time your annual assessment was mailed (usually in late spring or summer) to file an appeal, you will have to start gathering evidence to help your case in advance. You’ll need recent comparable sales or assessments (get some from the multiple listing services, check public title records, and have a real estate agent help you) that shows that your house has been valued too high. Look up your neighbor’s home valuation at the assessor’s office too. Your ideal comparable should be of the same square footage and age of your home and have the same lot size. You should have at least 5 comparables, although 10 is better. Once you have the comparables, put together a spreadsheet with the following information: address of the comparable property, sales prices and dates of sale, price per square foot, description of what makes the comparable similar or different from your home, photograph of the exteriors, photos of your home, and a map of all properties.

4. File the appeal and meet with the assessor (if possible). Ask to set up an appointment with the assessor. Sometimes this is possible and other times it is not. At a minimum, hand deliver all your evidence and get a receipt or send it by certified mail. You should hear back within two weeks to a month. If you don’t, follow up with the assessor’s office.

5. You win / you lose. If you win your appeal, your tax bill will be adjusted. If your appeal is denied, you can appeal again. If your appeal is denied again, you may need the services of a lawyer and an appraiser and you should plan to go to court. If the lawyer takes the case on a contingency fee (they get part of the savings as their fee) and you can get the appraisal for around $400, it may be worth the effort because often the appeal, which goes from the assessor’s office to a state board, will simply be settled as the state board wants to close as many cases as possible. So try it. It can save you money.? Used with permission from Carol Rodoni, Real Estate Unleashed.


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