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Cut your property tax bill by successfully fighting the assessment

by on
in Hiring,Human Resources,Small Business Tax,Small Business Tax Deduction Strategies

In many U.S. cities, houses bought just a few years ago have more than doubled in value. But unless you plan to move soon, such a "paper windfall" means nothing other than a soaring property tax bill.
 

Adding insult to injury, federal income tax rates dropped in 2003, so your property tax deductions are devalued. And, if you earn a substantial income, the itemized deduction phaseout rules may wipe out some of your property tax write-off.
 

Advice: Appeal a property tax increase if you think you have reasonable grounds. As much as
60 percent of taxable property in the United States is overassessed, says the National Taxpayers Union. But learn the appeal rules quickly. In some areas, you have only
30 days to appeal after receiving an assessment.
 

• First line of defense: Check proportions. Examine the notice to see if 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.
 

• Mistakes occur frequently. Many assessors don't even come on site; they simply compare descriptions of your home with seemingly similar ones in your neighborhood.
 

Even if those numbers are accurate, it's possible that your home is overvalued. It may be near a busy highway, which lowers its resale value, or located in a flood zone.
 

• Next, check the comps. If you can't find anything that obviously lowers your home's value, you may be able to show that your house is overassessed compared with other comparable homes in your area.
 

Find assessment numbers on homes similar to yours (in size, age and location) at your local assessor's office or on home-search Web sites. Find a half-dozen comps, and see if most assessed values are lower than yours.
 

• Battle the bureaucracy. If your assessment seems high for any previous reason, contact your assessor's office, and arrange a meeting. Bring all your evidence: photos, data on comps, etc. You may get a tax reduction based on obvious facts.
 

Don't give up if you can't arrange a private meeting or if the initial meeting results in no change. You can still place a formal appeal before 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.)
 

• Hire a consultant? If you don't have time to fight city hall, consider hiring a property-tax consultant or attorney to do the legwork. Fees are charged by contingency, a flat fee or by the hour.
 

Bottom line: Is it worth all this trouble? Probably. If you're able to lower your home's assessed value, you'll pay lower property taxes year after year. And you may wind up being able to afford the kind of expensive house that the appraisers claimed you already owned!

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