Some homeowners can’t wait to see the assessed value of their home drop. In fact, they’ll tell you the bigger the drop, the better. Why? Your property taxes depend on your tax rate and your property’s current market value is determined by a local assessor. You can’t dispute the tax rate, but you may be able to show why the assessed value is too high.
Appealing the assessment of your property’s value isn’t necessarily fun nor will it always lead to lower taxes — sometimes during an appeal you could find your property’s correct market value is actually higher than the current assessment. However, filing an appeal might be free (depending on where you live) and doesn’t require expertise. If you do a little investigative work and present a fact-based claim, your work could pay off.
If you believe the assessed value is too high, an appeal that results in a lower value could save you money for years to come. You might also be able to request a refund for overpaid property taxes from previous years.
Find out when you can file an appeal. Start the process by determining when you can appeal your home’s value assessment. You may be able to find the deadline on your local assessor’s website, which could also have instructions on how to file an appeal. Alternatively, you might have to call the assessor’s office and ask.
Some areas have a several-month window each year for appeals, often following the annual mailing of assessment value notices. In addition, you might be able to dispute your property’s assessment following a renovation or if you just bought the home.
Check your current assessment for errors. Every year, you should receive an official letter stating the assessed value of your home. If it looks accurate you may not want to do anything. But if you think your property value is lower than the stated value, you could start collecting proof to demonstrate your reasoning.
One of the first things to look for is a mistake on your property’s description, which may be on the letter you received. If you can’t find the letter, or don’t see the description, you could also contact your local assessor’s office or look online for your property card — also known as a worksheet or working papers.
It’s not unheard of for your property card to list an extra bathroom or incorrect square footage. Assessors aren’t always able to look inside a home during an inspection, and they might not know about renovations to a home. Some counties also use automated software to assess properties.
Make a note of errors on your property card, and try to estimate the value of each change, as you’ll be able to use these as a basis for your appeal.
Gather more evidence. To strengthen your appeal, you’ll also want to find evidence of why your home’s current market value may be lower than the official assessment.
- Make a list of comparable properties. Try to get a list of four to six properties in your area that are the same size, have the same number of bedrooms and bathrooms and are on similar lots. You could look up the market value of these comparable homes, or comps, using real estate websites that list recent or estimated sales prices. You also may be able to look through public databases or ask neighbors to find out their official assessed values. If you find the comps’ sales prices or assessed values are lower than yours, or they’re the same but your home is in worse condition, you may have a strong argument.
- Estimate the cost of repairs. A leaky roof, cracked driveway or another issue could lower your property’s value. Make a list of the faults, estimate cost for repairs and take pictures as proof.
- Make a note of changes in your neighborhood. A property’s value depends on more than just the home. If nearby houses were recently foreclosed on or local schools’ rankings dropped, your property could be worth less than it was before.
- Get a professional assessment. You could hire a state-certified appraiser to estimate your property’s current value. However, the assessment might cost $300 to $500, and this might only be a good idea if your research already looks fruitful. In some areas, you may need an official assessment to file an appeal.
Once you organize your evidence, it’s time to file an appeal.
Present your findings. The appeal process varies depending on where you live. If you have a simple scenario, such as a mistake on your property card, you might be able to make a phone call to the assessor’s office and get the change approved right away. But some counties require you to submit the appeal online or by mail, or you may have to schedule an in-person review at the assessor’s office.
It could take several weeks to months to hear back. If the decision doesn’t come back in your favor, you could file another appeal with an independent review board.
Outsource the work. If all of this seems like too much work, you could hire a law firm or property tax consultant to do it for you. Some firms even take work on a contingency basis, meaning you only have to pay if the appeal results in you paying less in taxes.
Bottom line: After gathering evidence, you can make a showing for why your home’s assessed value is too high and potentially lower your property taxes. But think twice if you’re considering selling your home soon. A lower assessed value might affect how much someone is willing to pay for the home.
Nathaniel Sillin directs Visa’s financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney
This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial adviser for specific information on how certain laws apply to you and about your individual financial situation.