6 Steps to Lowering Your Property Taxes

By Debbie Dragon Archive

With the recession dragging on, consumers around the country are looking for ways to save money wherever they can. As home values remain depressed, many homeowners are challenging their property tax assessments. The National Taxpayers Union estimates that as much as 60% of all taxable property in the United States is currently over-assessed because tax assessment cycles don't reflect the decline in home values. A wave of property tax reassessments requested by homeowners resistant to paying taxes on over-valued homes is adding new stresses to already-strained government budgets.

Here's a six-step plan for lowering your home's assessed value, whether the economy is thriving or declining:

1. Find out how your county calculates home values. There's no standard formula used for the calculation of home values. Check with your county to see if they calculate home values by looking at recent sales of similar homes in your area or by estimating the cost to rebuild a home. Sometimes, home value is calculated based on a percentage of the property's value — in which case you'll want to know what that percentage is so you can determine if the value that's been assigned to your home is reasonable.
2. Check your property card. Visit your tax assessor's office or website, and look at the property card for your home to ensure the information is recorded correctly. It will show square footage and data regarding the number of bedrooms and bathrooms, which all contribute to the value of your home. Next, make sure that any features that might decrease your home's value have been accounted for — things like an irregular lot size or a carport rather than a garage.
   
   Compare your property card with those of 10 or so other homes of equal age, style and features in your neighborhood. If you find that other properties are assessed lower than yours, you might have a valid case for reassessment. The assessor's file for your property should also contain the appraiser's inspection worksheet that includes the addresses of homes compared with yours. If your circa-1963 home is being compared to houses built in 2008, you can assume your home's value is less than the homes it was compared to, and chances are good your home was assessed too high.
3. Assessed value vs. market value. If you believe the tax assessment of your property exceeds the market value of the property, you'll have to do some research to get the sales price data for a number of comparable homes in your area. A real estate agent may be able to help you gather this information, or you may be able to get it from the county assessor or county clerk's office. In some cases, refinancing your home will provide acceptable proof for your home's current market value — check with your tax assessor to be sure.
4. Build your evidence. Create a spreadsheet that lists the addresses of comparable homes in your area, the price the homes sold for, and the date they were sold. Include the square footage and the price paid per square foot. Also include a description of the similarities and differences between your house and the houses you're using for comparison; in fact, take a photo of each of the properties if it will help prove your point at a glance. Your case for lowering your tax assessment is a strong one if you've found five to 10 comparable homes selling for at least 10% less than your property's current assessed value. If you haven't gathered this kind of evidence, you may not be able to lower your assessed value. Check with the assessor to find out whether hiring someone to conduct an independent appraisal is worth your time and money. Some counties will use this appraisal as evidence of property value, while others won't.
5. Set up an appointment with the assessor. Once you've gathered evidence to support your belief that you're being charged too much in property taxes, schedule a meeting with your assessor. This may not be possible or easy in larger counties, but at least make the attempt. If you can get an appointment, show the assessor your evidence, and ask for an opinion. If the assessor agrees your assessment seems too high, you'll probably have a smooth appeal process. If the assessor insists your home is assessed properly, be polite, but move on to the appeal process.
6. Appeal your tax assessment. Hand-deliver your appeal to your county board, or use certified mail with a return-receipt requested. You'll be contacted with a date to appeal the assessment, but don't expect an immediate review. You may want to attend other individuals' appeals to see what to expect at your own hearing. See what kinds of challenges are raised by assessors, and prepare your answers as well as visual proof.

While you wait for resolution of your appeal, make sure you continue to pay your property tax bill in full. If you don't, in the hopes that your assessment will be reduced later, you may find you've incurred penalties and even a lien against your home in the meantime.