Tens of thousands of homes that were appraised prior to the real estate crash are valued (for property tax purposes) at higher levels than today’s housing prices.
Strategy: Appeal a property tax assessment if you have reasonable grounds. The National Taxpayers Union, an advocacy group, says about 60% of the taxable property in the United States is overassessed. If your appeal is successful, your property-tax bill will be reduced.
But you may have to move quickly. In some areas, you have only 30 days after receiving your current tax bill to initiate an appeal. Here are five helpful suggestions.
1. Verify the dimensions. Examine the property tax notice to see whether it overstates your home’s dimensions. If your house has less square footage or fewer rooms than the notice states, chances are it has a lower value, too.
2. Look for mistakes. Some assessors don’t even look at your property; instead they compare descriptions of your home with seemingly similar ones in your neighborhood. Even if the numbers are accurate, it’s possible that your home is overvalued. It could be located near a busy highway or in a flood zone, which lowers its value.
3. Check the comps. You still may be able to show that your home is overassessed based on sales of comparable homes in your area. Usually, this is the easiest way to prove the tax collector overvalues your home.
Find assessment numbers on homes similar to yours—in terms of size, age and location—at your local assessor’s office or online. Compare at least half a dozen comps to see if most assessed values are lower than yours.
4. Battle the bureaucracy. If your assessment seems high for any of those reasons, contact your assessor’s office and arrange a meeting. Bring all relevant evidence, including photos, data on comps, etc. You may be entitled to a tax reduction based on obvious facts.
Don’t give up quickly if you can’t arrange a private meeting or if the initial meeting results in no change. You still can lodge a formal appeal with the local assessment board. (Before your appeal, sit in on somebody else’s public hearing. You’ll learn how the board operates and gain a sense of which arguments work best.)
5. Consider hiring a consultant. If you don’t have the time or inclination to fight city hall alone, you might hire a property-tax consultant or an attorney to do most of the legwork. Fees are charged by contingency (e.g., 25% to 50% of the amount saved in the first year), as a flat rate or by the hour.
Is it worth all the trouble? Probably. If you can lower the assessed value, you’ll pay less in property tax year in and year out. The savings can really add up over time.
Tip: For more information about filing an appeal, you can purchase a brochure from the National Taxpayers Union for $6.95 at www.ntu.org.
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