How To Save Money On Your Property Taxes

For many homeowners, property taxes are a great burden. They have risen at more than twice the rate of inflation this decade. This surge was understandable during the bubble when the market was hot and house prices were rising, as property tax is linked to home values. But now, when things have cooled off and property prices are actually dropping, some owners are still dealing with rising property taxes. If the value of your home isn’t going up but your property taxes are, you should file an appeal.

Fewer than 1 in 50 homeowners try to appeal assessments, even though up to 60% of properties are overvalued by assessors, according to figures cited by the National Taxpayers Union. Remember that the assessors work for the county; it’s in their best interest to assess your home for as high a price as possible as they receive the taxes you pay on it.

You actually stand a pretty good chance of success in getting your taxes lowered. Here’s a process that could potentially save you hundreds or thousands of dollars each year:

Understand Your Local System

Different tax authorities use different methods to calculate home values. Some looks at recent sales of similar homes, others estimate cost to rebuild, and others may do something entire differently. Call your assessors office and talk with then to clarify exactly what method they use.

Look At Your Assessor’s Evidence

Speak with your local assessor about your particular property and ask for the evidence or documentation used to value your home. Make sure that details about the characteristics of your property are accurate. The assessor’s file should have a worksheet that the appraiser filled out with the addresses of homes that he or she used to compare with yours. Make sure that the others house are in fact similar (built around the same time, similar square footage, number of rooms, add-ons). This may seem a bit pushy, but it’s your home, time, and money we’re talking about.

Get Your Own Evidence

You may have around 60 days or less from the time your annual tax assessment was mailed (typically during summer) to file an appeal. Prior to this you need to do your own research and arm yourself with recent comparable sales or assessments of similar homes that were sold or appraised for at least 10% below your own. Get at least five to ten examples. Actually drive out to the properties, take photos of the exteriors, note any similarities or difference, and put together a listing of your findings.

Present Your Case

Meet with the assessor and go over the evidence you’ve found. He or she may agree with your findings, which makes the rest of the process easier. If he or she does not agree, find our why. Make careful note of these reasons as this is what your need to counter during the formal appeal.

File A Formal Appeal

Get the paperwork and file a formal appeal with your local county board. Be prepared for a wait/response time of weeks, perhaps months. In the meanwhile, attend another hearing to get accustomed to the process. Prepare presentation materials (photos, visuals) and rehearse what you want to say. Keep it brief and allow time for questions.

With reason and a bit of luck, you may have a decision in your favor and a few extra dollars in your pocket.