3 steps to appeal your property taxes
Q: I bought my house in 2011, in a down market, but I paid too much. Can I get my taxes lowered by pointing out comps in my area to the tax assessor during the period they accept tax grievances? –Jack S.
Q: My taxes were raised by almost $2,000/year last April. Can you tell me how to appeal or reduce that? –Sameh G.
A: Jack, you feel that the value of your home has declined or is otherwise lower than what you paid for it. Sameh, your home’s value appears to have increased — or at least your tax assessor thinks it has. Although it sounds like the two of you are in roughly opposite scenarios, you both must go through essentially the same process to achieve your identical goal: lowering your property taxes.
Here are the three basic steps you should take:
1. Research the tax appeal guidelines that apply to your home. Every locality is different, but the general rule is that your local (usually county) tax assessor determines the assessed value of your home based on its market value. That assessed value is the basis of your property taxes.
Accordingly, when the market value of your home increases above the assessed value, your property taxes may increase the next time your home is reassessed. Sameh, it sounds like this is what happened to you.
(Some states have limitations on how much your home’s assessed value and/or taxes can rise in a given time period, regardless of the change in its market value.)
The converse is true: If your home’s market value declines below the assessed value, it is subject to reassessment downward, with a corresponding decrease in property taxes. Jack, this may apply to your situation, no matter what you paid for the place.
However, you can’t necessarily appeal your home’s property tax assessment anytime you want to; visit your local assessor’s website to find the forms, timelines and requirements to protest or appeal your home’s assessed value.
There is usually a period of time every year during which these appeals are accepted, and the process usually involves you making the case that your home’s market value is less than the assessed value, showing recent sales as proof of what you say your home is worth. If you can’t find the information online, call the tax assessor’s office in your county or town and ask them to brief you on how the appeals process works.
2. Get comparables. Again, homeowners who want to protest their home’s assessed value are generally required to state what they believe their home’s market value actually is, and to back up their estimate of their home’s value with data on nearby homes that have recently sold (i.e., within the last six months or less).
You can get this data several ways. Real estate listing sites often provide it for free; for example, visit Trulia.com and type your address into the search box — scroll down, and you’ll find recent sales listed out for you. Alternatively, contact the local real estate professional who sold you your house and let him know what you’re trying to do — many will happily provide you with recent sales data at no charge.
Most tax assessors will want to know not only the sales price of the comparable homes, but also some basic facts about those properties and how they compare to yours, like the number of bedrooms, bathrooms and square feet.
3. Prepare an estimate of your home and submit it for appeal. Once you have the recent sales data at hand that backs up the dollar amount you think reflects your home’s true fair market value, assuming that this number is actually below your home’s assessed value, you’re ready to complete the assessor appeals form and submit the documents for consideration. Some assessors may require that you physically come in and make your case, but most will simply review the information and make a finding, which you then have the right to appeal in person if it does not come out the way you like.
In any event, keep in mind that your property taxes are deductible from your federal income tax return, and that they increase only when your home’s value does. Keeping this in mind might provide some solace, Sameh, if you review the comparable sales data and find that your home’s value has in fact risen — overall, that’s a good thing!