Most property assessment appeals or challenge laws are written at the State level and implemented at the county or local municipality level. LowerAssessment.com has researched your State’s residential property tax appeal process and listed each individual State’s webpage corresponding to that process. If a particular form made at the State level was found to be used, then the webpage for that form was also listed. There are many instances of individual counties having their own particular form for the appeal process. If this was the case and each form was different, then the form webpage was not listed. Other pertinent information such as county assessor information, etc. is listed if it was found. Just click on your State to get started.
The majority of residential property assessment challenges or appeals have two questions that must be answered. How much do you think your home is worth (Market Value) and how can you prove it? These two questions must be answered before an assessor, appeal board or judge will grant you a reduction in property tax. The good news is answering these two questions is not hard to do if you follow our step by step instructions. The biggest problem homeowner’s face in reducing their property assessment is finding the right information and presenting it to the assessor, appeal board or judge.
Ask any assessor how they come up with the assessed value of your home and they will most likely tell you they use comparable sales from within your neighborhood. Most will also say they haven’t seen the inside of your home or the rear of your home. In fact mass assessments done by assessors are said to be wrong 30% to 60% of the time (Consumer Report magazine, May 2010 and National Tax Payers Union). Because so many homes have to be assessed by so few people, making assumptions about these properties is necessary. Assessors assume you have an average interior for the neighborhood. They assume you have upgrades consistent with the type of neighborhood in which you live. Only you know if the assessor is right or wrong because you live in the house. This is the information that has to be conveyed to the assessment board when you challenge or appeal your assessment.
Before we get into appealing your residential property value there are a few definitions you will have to be familiar with in order to complete the requirements for a property tax reduction. They are:
Arms Length Transaction: This is a transaction between a buyer and seller, each of whom acts in his or her own interest. This means there were no outside influences. Foreclosed property, divorce settlements, estates sales or property bought from a relative are not considered arms length transactions.
Appraisal: An opinion or estimate of value of a property.
Appraiser: One licensed and qualified to estimate the value of a property.
Assessment: The process of placing a value on a property for the purpose of taxation.
Assessor: An official who determines property tax assessments.
Assessed Value: The home value established for property tax purposes. This could be different for every municipality depending where you live. If your home has a 100% MARKET VALUE of $100,000 and all properties in your area are ASSESSED at 80% of market value then the ASSESSED VALUE of your property is $80,000. When you look at your tax bill be sure you find the 100% MARKET VALUE of your property NOT the ASSESSED VALUE. If your tax bill does not state the MARKET VALUE of your home call your assessment office and request what they use as your 100% MARKET VALUE. This is very important!
Assessment Board: A group of people who meet on a specific day to look over homeowners appeals/challenges to their assessment.
Comparable: A home that has sold recently that is similar to the home being valued.
Market Value: The price a seller is willing to sell a home at and a buyer is willing to buy the home at provided there are no influencing circumstances affecting the sale. Foreclosures, estate sales and sales to relatives are considered to have undue stimulus associated with the sale and do not reflect market value.
The Sales Comparison Approach or Method: The most common method used by appraisers to find MARKET VALUE. This method compares your property to other SIMILAR properties that have sold in YOUR neighborhood. I stress the words “similar properties” and “your neighborhood” because these two items will make the strongest case before the assessment board.
Now down to business!
Every state in the union has a set of instructions or laws on how to appeal your taxes and this web page lists most of them. However, few states will tell you in detail, how to find the value of your home in order to prove the market value. Most will tell you to compare your home to others in your neighborhood and it stops at that! Remember the burden of proving the market value of your property is on you. The assessor has already put a value on your house and it is up to you to prove the assessors’ value is incorrect. We are looking at the MARKET VALUE of you home. Many States have equalization rates, residential assessment ratios and mill rates which are used to establish how much you pay in taxes. But all these numbers and ratios are based on the MARKET VALUE of a property. Don’t concern yourself with the ratios and mill rates, etc. Once you establish a lower MARKET VALUE the other numbers fall into place naturally.
- STEP 1: The very first thing to do when trying to appeal your assessment is to check the assessor’s information about your home. Is it correct? Does the assessor’s records show your home as a four bedroom, three bathroom home when it is a three bedroom, two bathroom home? Do you really have an enclosed porch or is that porch included in the square footage of the home thus increasing your home’s assessment? Do you have a basement or is the assessor charging you for a basement when you don’t have one. These are all common errors I have seen on tax records over the years and some homeowners have been paying for them for decades. Their homes have been unwittingly compared to more expensive properties as opposed to more similar homes. Call your assessor and set up an appointment to meet with them and fix your records. The assessors’ phone number can be found in the phone book or online. The number is usually found in the blue pages under County, City, Town or Village Government. The heading will be Assessor.
RECAP: Check your tax records. Question any discrepancies.
Hint: We don’t need to bring any discrepancies in our favor to the assessor.
- STEP 2: If your tax records are OK and you still want to appeal your assessment the next step is to set up an appointment with your assessor. Larger municipalities may not give you an appointment and will only allow you to appeal your assessment during a specific time period. At your appointment with the assessor he/she will ask you why you think your assessment should be lowered. Be prepared to answer this question and show proof.
Showing up at this meeting prepared to show him your homes MARKET VALUE derived from similar comparable homes within your neighborhood placed on an organized work sheet and able to answer the assessors questions will undoubtedly show the assessor you mean business in a professional way. These comparables can be found online, in your local newspaper or at a local real estate brokers office. Most real estate agents will give you this information free because you could be a future client. I always offered to pay a few dollars to their coffee fund.
If you recently purchased your home below the assessed value, using an ARM’s LENGTH TRANSACTION, show the assessor your contract and associated appraisal. This provides excellent proof that your assessment should be lowered.
RECAP: Make an appointment with your assessor and explain to him/her why you think your assessment is too high. Be able to explain how you arrived at your homes MARKET VALUE.
Hint: Don’t ever get mad while dealing with the assessor. You still have more options if he/she doesn’t accept your reasons.
- STEP 3: If you still don’t get the assessment reduced you need to file a grievance/appeal/challenge to your assessment. Each State has a different name for going before a board to review your case. The boards are usually made up of citizens with some kind of real estate background. When you file for this challenge you will usually be given a choice to appear before the board or not appear before the board. Just as a rule of thumb you should always try to appear before the board if at all possible. It only takes a few minutes and they may ask you a question or two but it lets them know you are serious. The board normally gives their answer within 30 days. It differs with each State.
RECAP: File an appeal/grievance/challenge to your assessment within the allotted time frame. This entails filling out a small amount of paper work and mailing or delivering it to the assessors’ office. Meet with the board on the assigned day if you can.
Hint: The local municipality has strict guidelines on when they will accept this paperwork. You can usually get the paperwork from the assessment office or online. Send in the paperwork along with any documents you have showing how you arrived at your MARKET VALUE.
- STEP 4: If you still aren’t satisfied with the outcome of your appeal you can appeal to the next level which usually involves filing a claim in small claims court or local district court. Many assessment reductions are won in court. This will probably cost you money to file and you will go before a judge with your proof of value. He/she will rule on the value of your property. You may be able to appeal the courts decision but this varies from State to State.
RECAP: File a challenge/appeal/grievance at the next level.
Hint: You may need some legal help at this level.
We have covered the basics of appealing your residential property tax. For more information on your specific State, click on the map above. Good luck.