Appealing a Property Tax Assessment

Friday, Feb 24, 2012

One of the small comforts for homeowners whose property values have fallen in recent years is that their property taxes usually go down as well. But you may have to appeal your assessment to get the full benefit.

Your assessment, of course, is what your local unit of government – typically your county or municipality – calculates your home is worth for tax purposes. It’s similar to, but different from, an appraisal, which is an estimate of property value for purposes of obtaining or refinancing a mortgage.

Property taxes, of course, are based on the value of your property. So if your home declines in value, as happened to most homeowners in recent years, your property taxes should go down as well, at least in theory.
 

Is your assessment accurate?

 
The problem is, your assessment may not reflect the true market value of your home. Government entities rely on property taxes to fund their operations and essential public services like schools and roads, so it wouldn’t be surprising if assessors were to take an optimistic view of property values in their community, particularly following declines as severe as those seen in recent years.
 
In addition, your assessment may be out of date. Although in many states residential properties are assessed every year, in others it may be less frequent – Maryland, for example, reassesses home values every three years. So if property values have been falling during that time, you’re still stuck at that level.
 
Fortunately, you have the right to appeal your property tax assessment if you think it’s too high. Unfortunately, the government entities involved don’t necessarily make it easy or convenient to do so.
 

Appealing your assessment

 
Appeals of property tax assessments are typically done before an equalization board, board of review or similar panel, although in some states initial appeals are submitted to a single official. These boards or officials have the authority to lower your assessment, but your opportunity to do so is usually limited. In many states, you can only file an appeal within a certain time after receiving the notice of your new assessment – in some cases, as little as two weeks.
 
That means that if you want to appeal your assessment, you need to do your homework and be ready before it arrives in the mail. You probably have a good idea already if you’re going to want to appeal or not, based on your current assessment – if you think your last one came in high, there’s a good chance your next one will as well.
 
The schedules by which assessment notices are mailed out vary widely from state to state – there’s no consistent pattern. Deadlines for submitting appeals can be all over the calendar – though many states set their deadlines for late winter or early spring, in others you may receive your notice and have to submit your appeal in midsummer or late in the year.
 

Using comparable sales

 
When you present your appeal – which you’ll need to do in person or in writing – you need to make a case that the official assessment has overestimated the actual value of your property. To do that, you need to present convincing evidence in the form of comparable sales of other homes in your community. You can usually find public records of recent sales through the same assessor’s office where you’ll be filing your appeal.
 
Comparable sales are sales of homes that are similar to yours and are either in your neighborhood or one like yours. You can adjust for certain features like square footage or number of bathrooms, but generally you want to find homes that are of a similar style, age and quality to your own. If you can’t find enough comparable sales in your immediate neighborhood from the past year, look for other neighborhoods in your community with similar homes and where property values have been similar in the past.
 
Be careful of relying too much on sale prices of foreclosed properties. Although multiple foreclosures drag down property values in a neighborhood, they typically sell at a significant discount compared to conventional “arm’s length” home sales. Assessment boards know this, so the more you can support your case with sales data from conventional home sales, the better.
 
Some counties and municipalities provide advice on how to assemble information on comparable sales and put together a presentation to the board. In general though, you’re going to have to research it on your own.
 

Making your presentation

 
When you make your presentation though, just remember to stay focused on making a good argument for the actual value of your property – appeals boards won’t be swayed by references to financial hardship, the other taxes you past, your military record or other evidence of good citizenship – all that matters is what your home is worth on the market. The more objectively and persuasively you can make that case, the better your chances are.
 
Equalization boards won’t reduce your assessment due to financial hardship or retroactively reduce your assessment from previous years. If you disagree with their finding, however, you can usually appeal to a higher authority, such as a state board of review. The names and number of these higher authorities vary from state to state, so you’ll need to check with your local assessor’s office to see what the procedure is in your state.
 
 

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