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How to Contest Your Property Taxes & Win

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The next time you go to your mailbox, you may be in for an unpleasant surprise. This is the season of property tax assessments, and your property taxes may have been reassessed at a higher rate.

First will come a polite notice of assessment, followed closely by your new tax bill. Depending on home sales in your area and how badly your tax assessor is motivated to collect higher taxes, your property taxes could be raised significantly.

The homeowners most taken by surprise by new assessments are the ones who have lived in their new homes for less than a year. When new homeowners close on their new homes, lenders require that they pay the current property taxes to the end of the year. Most new homeowners expect to be taxed at that same rate the following year. What they don’t realize is that this low, favorable rate is based on what the previous homeowner paid in taxes, based on what they paid for the home and how the market changed while they owned the home.

What happens now is that new homeowners will pay a new rate – a rate established by the purchase price they paid on their new home and comparable prices paid for other homes in the neighborhood. This new rate can be assessed by hundreds or thousands of dollars higher than the previous owner paid.

Taxing authorities tax as closely as possible to current market value. So if you’ve already received that uncomfortably large property tax bill, I’ve got some good news for you. You have the right to contest the new assessment, and it isn’t as much trouble and red tape as you would think.

Now, I know there are skeptics out there who think that researching property taxes is more of a hassle than paying them. But would you still think that if I told you that over half of the people that protest their tax assessments get them reduced? Studies show that “sixty percent of America’s households have sufficient evidence to warrant a tax reduction.” So what have you got to lose?

According to Harry Koenig and Bob Lafay’s book: Save a Fortune on your Homeowners Property Tax, published by Dearborn, lowered property taxes are the direct result of lowered assessed values.

So what is the “assessed value”?

The assessed value is the amount of money the assessor thinks your property is worth. Your objective, then, is to find a way to lower the assessed value of your home and to convince the assessor that you are right.
The authors divide this process into eight steps.

  • Knowing why and when you should appeal your assessed value
  • Understanding how your property tax is levied
  • Determining the value of your property
  • Adjusting your homeowner’s property value
  • Researching your tax appeal
  • Preparing your tax appeal
  • Presenting your tax appeal

Enjoying your win!

When to Appeal

So, first things first. How do you determine why and when you should appeal your assessed value? Authors Koenig and Lafay say there are four circumstances in which you have substantial evidence for a case:

  1. If your home’s assessed value is too high. If your property is overvalued (relative to similar houses in the neighborhood), it’s also over-assessed.
  2. If you have an illegal assessment. Check to see if your home is assessed at a higher percentage of its market value than the law allows.
  3. If you have an unequal assessment. This is when a home is valued over its market value. It is illegal for a home to be under the percentage of the market value, and it is unequal if it is greater than the market value.
  4. If there is an error in your tax records. It’s a good idea to closely examine your tax records. There could be a mathematical error in recording the details of your house or lot. The most common errors are found in the building’s age or the building’s size.

If you fit into any of these four categories, you have reason to pull together a case and appeal your assessed value. Since “overvalued, over-assessed property is one of the most common and successful grounds for challenging your tax bill,” it is important to determine the value of your property.

“This entails examining your tax records in the local assessor’s office to ensure that the data on which your assessment is based are accurate and complete.”

You’ll also want to look at homes in your neighborhood that are comparable (have similar measurements/built around the same year) to your property and find out how much they’re paying for property taxes. You may find comparable properties are charged substantially less than you are, and this is a good argument.

It’s not easy work, but it’s certainly worth your effort. If you feel you can’t tackle this on your own, you should contact your local tax assessor or real estate agent for help. Don’t sit helplessly watching your tax bill rise year after year. You could be saving hundreds, maybe even thousands of dollars annually.

Here’s an additional guide to lowering your property taxes.

By Kate Kemp


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