And guess what? A high percentage of homes really are over-assessed -- anywhere from 30 percent to 60 percent, including commercial property, according to the National Taxpayers Union. Yet few homeowners do anything about it. Nationally, only 2 to 3 percent of homeowners ever attempt an appeal.
That's too bad, because the process is actually rather simple. And the odds are good, too: about 20 to 40 percent of appeals are successful, says NTU spokesperson Pete Sepp.
So what should you do if you want to appeal your property tax assessment? Read on.
First of all, take it from the NTU: nothing ventured, nothing gained. "Both percentage appealing and percentage succeeding stats suggest to me that the odds of winning some kind of reduction are better than most people perceive," Sepp tells HousingWatch. "If people knew that the appeal process was reasonably straightforward and that they had a fighting chance of obtaining a reduction, I imagine that many more folks would investigate further."
The NTU recently updated its 25-page consumer brochure, "How to Fight Property Taxes," which is available for download from its site. It covers everything, including what to say at a hearing.
"I encourage people to view this process as if you were contesting an expensive parking ticket," says Sepp. "It's not a big jury trial in a court of law so much as it is a structured forum for settling grievances."
Here is what else you should know:
- Get your property card. First, get the information in the assessor's file about your home from the property card, which will include the method and data used to determine value, the lot size, square footage, any known upgrades, and of course the number of bedrooms and baths. Do not take no for an answer. Some assessors may try to tell you that you can't see this information, but it is public record and it is your legal right to see them.
- Double-check accuracy of information. If you turned a closet into another bathroom, or converted an attic into a fourth bedroom room, or knocked down a wall to change two small bedrooms into one large master suite, these improvements should be reflected on the property card. If the card is not accurate, you could have a new assessment put on your home that will take it's value up rather than down. But the same is true if the assessor thought you had steel and brick siding like your neighbors, when in reality you have vinyl and stucco, and that bathroom addition was done by the previous owners 10 years ago.
- Understand the math. The tax assessor's offices vary in how they determine a home's value. Some base it on recent sales data from similar homes, others may estimate the cost to rebuild or use a combination of methods. Some incorporate tax breaks for homesteaders or farmers. The assessor may then use the full determined value, or a percentage, such as 90 percent of the actual assessed value. (This is why historically assessed values of your home are far less than what they sell for-but don't worry you can still qualify for a reduction.)
- Get comps. You can get sales data from Zillow.com, RealtyTrac and ListingBook, or a Realtor. Just be careful not to use their own estimates based on current listings. Instead use actual "sold prices" for the time period you're evaluating. The assessor's office might also have this data available. You will need a minimum of 3 to 5 homes, but there should be no need for more than 10 in your comparison.
- Use the correct assessment date. Make sure your proposed assessment is for the same date the assessor used. If the county assessment was for, say, January but you used data from April, your estimate may be considered inaccurate and your case could be dismissed.
- Consider using a professional report. Now granted, the cost of any savings you make would be offset by what you pay to a professional, but depending upon how much you're looking to save, this could be worth it. Appraisers can charge anywhere from $200 to $500, and property tax consultants typically work on contingency for 25% of the savings. But before you hire someone, if you recently refinanced your mortgage or had a home equity loan, you might already have access to a professional appraisal.
- Prepare your document. If after reviewing the data you gathered, determine if you can prove that your property was assessed at a higher level than the legal standard and/or at a higher than the level of nearby comparables. If so, prepare your argument on paper. When you can do so honestly, agree with much of what the assessor did and stress that you do not question the assessor's sincerity. Just point out the differences in valuations you found. Avoid calling for their head on a stake, saying your taxes pay their salaries, or just calling the assessor incompetent.
- File the appeal on time. Make sure you appeal during the right time frame. Typically you will have 60 days from the time your annual tax assessment was mailed to you, which is usually during the first three or four months of the year. Hand deliver the packet so you can get a stamped receipt, or use certified mail. Both will give you an office date of delivery. You don't want to lose your case because you're told you didn't file on time.
- Wait for a response. Property tax appeals can take place through hearings, in which the homeowner personally makes a case before a local board of officials. Your officials will notify you by mail of a hearing date. However, some governments handle the entire appeal by mail, and you simply receive a decision on your appeal in the mail a few weeks later.
- Attend hearings. If your area handles the appeals with public hearings, attend a handful of hearings from other property owners before your date arrives. This gives you a chance to see if the board members raise any issues that you may not otherwise have been prepared to answer.
Should your first appeal fail, or should another appeal become necessary, most states allow three levels of appeal in property tax cases. Typically, a state agency is the second level, with the courts reserved for the third level of appeal. Very few homeowners find it necessary to go to court for relief.
If you have filed an appeal or are looking to do so, write to us and let us know how it goes.
Sheree R. Curry is an award-winning business journalist who resides in a Minneapolis suburb.