How to Dispute Your Property Taxes
Your property taxes just shot up about 15 percent. Here's how to go about disputing the bill
You wanna fight the power, eh?
You're not alone. With property taxes continuing to rise nationwide, many homeowners are starting to challenge what they see as exorbitantly high demands made on them by their local assessor's office. Follow their lead, and you have a 50 percent chance of succeeding, says Pete Sepp, a spokesperson for the National Taxpayers Union.
First, a primer. The amount of property tax you pay is determined by multiplying your city's tax rate by the assessed value of your property and all of the structures on it. The value of those structures can change dramatically if you make improvements, like putting on a new family-room addition. Most homeowners pay property taxes once or twice a year; they can also be amortized into monthly mortgage payments.
To determine the value of your house, assessors will either stop by for a detailed inspection during the town's reassessment period, or simply check real estate documents to see how much you paid for the property. In some cases, they'll just look at the median price paid for homes in your area and base their calculations on that.
Reasons for disputing assessments vary. Maybe you suspect that the assessed value of your property exceeds its true market value. Or you might discover that your neighbors, who live in an identical four-bedroom Colonial down the block, are paying less in taxes than you are. There's also the possibility that you're entitled to exemptions that weren't taken into account. In some jurisdictions, for example, homeowners renovating historic properties can get a partial property-tax reduction.
You don't typically need a lawyer, since most municipalities are more than willing to walk you through the appeals process. So where do you start?
"The first thing you need to do is call and ask about the review process" of your local assessor's office, says Geoffrey White, an attorney with Vorys, Sater, Seymour and Pease, in Cincinnati. "Find out what the important timing points are. Since you might only have 60 days (from the time you receive the assessment in the mail) to do this, you don't want to sit on it."
Most municipalities include dispute forms for you to send back if you question the assessment. After that, the process varies, but usually you'll be asked to attend an informal hearing at the assessor's office, where you can state your case. If your argument is strong enough, you might be able to resolve the problem right then and there. For example, if the assessed value of the house you just bought is higher than what you paid for it, producing the contract of sale could be enough to get the tax reduced.
If not, you may be asked to attend a second, formal hearing, during which you'll have to convince a review board made up of local assessors that their findings are inaccurate. Be prepared: If, for example, you think the assessment of your home is not in line with other similar properties in your area—with comparable square footage and other features like swimming pools, additions, etc.—get detailed descriptions of those properties from a local real estate agent to bolster your case. You should also bring along tax records, which you can usually find by researching property rolls at the assessor's office. Photos are a good idea, too.
If you do succeed at getting the tax reduced, great. If not, all it will have cost you is a few hours of your time and possibly a $5 to $30 filing fee.
STRATEGIES FOR REDUCING YOUR ASSESSMENT
That latest property tax bill is not set in stone. Before you write the check, here's some useful advice.
• Make sure all the deductions you're entitled to were granted.
• If something looks off, check the assessor's math and the description of your property. Sometimes the problem is simple human error, like miscalculated square footage or an incorrect number of bedrooms.
•Check the assessments of at least five comparable properties.
•Make adjustments for differences between your property and the comps.
•If your assessment is unfair, make an informal appeal to the assessor first. If that doesn't work, file a formal appeal.
•Attend an appeals board hearing to get a feel for the process.
•Prepare a written summary of your case and rehearse your presentation.
For more information, order the National Taxpayers Union's $6.95 guide, How to Fight Property Taxes.