It might seem easiest to suck it up and pay your hefty bill, but you might be eligible for a significant tax reduction upon learning how to properly understand and review your property taxes and the process by which you may appeal them.
1. Closely review your property tax bill. While the "amount due" is eye catching, it may not necessarily be the most crucial part of your statment. Notice the rate of taxation and assessed value of your residence, which is normally determined by a formula. These numbers determine your tax bill and it is important to understand and check the rate of taxation and assessed value for errors. You can confirm these numbers by contacting the city or county assessor's office.
2. Ensure your tax assessment is current. It is not unusual for tax assessments to lag behind the current market value. Sometimes, property taxes are updated only every few yeas. If you know that property values have decreased in your local area, but assessments remain unchanged, then it is probably time to pick up the phone in order to request a new assessment.
3. Check for errors. Assessment criteria are normally tied to fair market value based on a list of attributes which are plugged into an automated valuation formula. In order to verify that the information pertaining to your property is correct, you may request a detailed checklist from your assessors's office. Verify the square footage for your house and land, number of rooms and outbuildings (garage, in-law suite, pool house, etc.), and property type (commercial, residential, or mixed).
4. Learn the process by which your local government assesses property value. Know how assessments work within your locality: the frequency at which they are performed and how values are determined. Are homes assessed based on recent sales or replacement value as determined by an insurance company? You cannot make a viable arguement without proper understanding of the process of valuation.
5. Compare like properties. Check out similar properties and learn of their assessed values by checking local records and home sales in your area. Search for patterns, converse with neighbors, and follow up consistently on the homes that sell in your neighborhood. If you discover that your assessed vale is drastically higher than that of at least three comparables in your immediate area, you may be elligble for an appeal.
6. Check eligible tax exemptions/credits. Research to learn whether you are eligible for a homestead exemption or other tax credit as such tax breaks could significantly lower your tax bill — even if your assessed home value is correct.
7. Search for freezes/discounts. Perhaps your home is ineligible for an exemption or credit. However, you may be eligible for a tax break. Seniors, veterans, and disabled individuals, regardless of their home values, often qualify for tax freezes or discounts.
If you believe a lower assessed value is in order upon review of your statement, you may request a property tax reassessment.
In the event that you decide to appeal your assessment, the guidelines for doing so are generally included with your assessment letter or you may visit the assessor’s website. You will likely submit your argument for review via letter or online. Once received, a review board will determine whether a reassessment is appropriate.
You may also hire a tax or real estate professional with experience in property tax assessments and appeals. Be aware that their fee might be considerable, so even though you may receive a lower assessment, you will still be expending monies on the advise of a professional.
You may even go one step further by appealing your appeal. If you wish to escalate the matter, you may appeal a denial to the extent of presenting it to a state board or court. This, too, will require financial expenditures.
Remember that you are still responsible for payment of your property taxes while any action is pending. Unfortunately, there is no free pass on taxes during an appeal process. In the event that you win, you will receive a refund for any overpayment. Also be aware that it is possible that your new assessment will be higher than the initial assessment which you are attempting to appeal, so be sure to do as much research as possible before you begin the appeal process.