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How to Appeal the Property Tax Assessment On Your Home

By David Bakke

With the housing market having taken a serious hit in the recent past, I am sure you all know that home values have been plummeting. Well, one thing that did not plummet along with that is the property taxes most people are paying on those homes. The taxes some of us have been paying on our homes have been inaccurate (or unfair) to say the least. Several months after the housing market was in a full-fledged decline, I started seeing a good bit of coverage on this topic. And at the top of the list was what could the average homeowner do about it? About the only remedy is to dispute the property tax assessment on your home.

I saw all kinds of websites and links to people offering their help and services, often for a pretty hefty fee. My first question was…is this even worth doing? If it costs me $500 to effectively dispute the property tax assessment of my home and I end up with $500 in savings, isn’t that a waste of time?

A Do It Yourself Appeal?

So, after quite a bit of research, I found out exactly what I had to do to complete this process. Getting this information almost seemed more time consuming and difficult than the actual process. You didn’t think they’d actually make it easy, did you? This process is probably going to differ slightly from state to state but I’ll give you the quick rundown.

From The Beginning

The first thing that I found out was that it was too late to dispute the value on my home for this current tax year, which didn’t surprise me in the least. So, my next project was to find out what I had to do to dispute next year’s assessment. The first obstacle I had to dig through was everyone telling me that “it’s too early,” or “call back later,” and things like that. Again, they’re not going to make it easy.

The first thing you should do is contact your local Tax Assessor’s Office to find out the exact procedure for your locality. After that, I found out the following:

The Letter

Sometime early next year, I will be getting a notice in the mail from the state with their tax assessment of my property for the year 2011. The person that I spoke to at the Tax Assessor’s Office told me that by law the state had to send the letter out, but if I wanted to really ensure that I get the letter, I could file a property tax return form up until April 1, 2010. This all sounded a little cryptic to me. If they’re required to send it out by law, then why would I need to file something to ensure that they send it out? I’ve decided to roll the dice on that one for now. We’ll wait and see how the beginning of the year goes.

The Appeal

After you receive your letter, if you decide that you disagree with the state’s assessed value for your home, you can file an appeal. And basically, the first step in this appeal is to write a letter to the Tax Assessor’s Office. This letter must be sent within 45 days of the receipt of your letter from the state.

And basically, you simply tell them why you disagree with their assessment. But along with why you disagree, you do need to provide some sort of concrete evidence. The person that I spoke with wasn’t too forthcoming on what this proof might be, but after a little prodding, she explained that it should involve two key things to “prove” my case.

The Proof

First, you will need a current appraisal of your home. And obviously, these cost money. An average amount for an appraisal of my home would be about $400. The second piece of advice she offered was to include recent home sales in your area of homes that are “comparable” to yours in size. If your home is assessed at $200K, for example, but you can show that six other homes in your neighborhood of comparable size recently sold for $170,000, then you should have a pretty good case. Where do you get these “comparables”? Believe it or not, I found a real estate agent that ran them for me for free. I’d imagine you could do the same as well if you look around hard enough.

The Results

After this, the Assessor’s Office will get back to you. They either stand by their original assessment, or they make an adjustment. Rather than ending my research there, I continued on with my questioning (the rep at the Assessor’s Office was fairly irritated with me by now). If you still disagree with the result, you can appeal it again. You simply write them back and tell them you still don’t agree. It is at this point that they will do “further” research into your case. After this, you will be sent another letter.

Still Don’t Agree?

And if you still don’t agree, you can pack up all of your proof and schedule a personal appearance in front of your county Board of Commissioners. There you can state your case in person and a final, non-disputable judgment will be rendered.

Is It Worth It?

At the very least, this IS worth it. I couldn’t uncover many statistics on the subject, but one set of statistics that I found showed that 26% of the time people were successful in their appeals, receiving an average reduction of 13% in their home values and an average savings of 19% on their property tax bills. The biggest thing you need to weigh is the cost of getting an appraisal done on your home versus what you might potentially save. Consult and even utilize a professional if you wish, but just remember that it’s all a risk. If you spend $1,000 and end up with nothing in savings, then obviously it wasn’t such a good idea. But if you genuinely feel like you have a case that could lead to substantial savings, I say go for it.

Have you had an experience with disputing your property tax assessment? Any stories of people succeeding or being turned down in their appeals? Feel free to share your experiences with our other readers below.

(photo credit: wonderlane)

David Bakke
David started his own personal finance blog, YourFinances101, in June of 2009 and published his first book on ways to save more and spend less called "Don't Be A Mule..." Since then he has been a regular contributor for Money Crashers. He lives just outside Atlanta, GA and most all of his free time is taken up by his amazing three year old son, Nicholas.

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Comments

  • http://www.fatwallet.com Laura Pagles

    We’ve appealed our taxes twice. Our first appraisal was successful. One thing to look for is the county’s facts on your home’s assets and dimensions vs. the actual numbers. We found that the county showed one room and our patio as being larger than they actually were. These facts helped to reduce their assessment of our home’s value.

    Laura P.
    FatWallet.com

    • http://www.moneycrashers.com david/moneycrashers

      Laura

      Great stuff–anything you can get on your side when you go up against thse folks I’m sure is a big boost

      Thanks as always for contributing

  • http://www.rebatesmoney.com/ Lop at Rebates Money

    To compare property taxes, everyone should check out zillow.com in order to see how much your neighbor are paying their property taxes. This way, you have more ammunition when it comes to your appeal.

    • http://www.moneycrashers.com david/moneycrashers

      Lop–

      I’ve heard about zillow but haven’t checked them out yet–thanks for the link and thanks for stopping by!

      • http://www.rebatesmoney.com/ Lop at Rebates Money

        Not a problem…i’ll be visiting often since I think you got a great site that offer quality financial advice.

        • http://www.moneycrashers.com david/moneycrashers

          Thanks for the kind words!

  • http://www.abundatrade.com Tracy

    Clearing the title is the best way I believe you can make progress on paying a lower property tax rate.

    • http://www.moneycrashers.com david/moneycrashers

      Tracy

      Could you elaborate on that?

      I’m not sure I understand you and I’d love to get a new angle on how to save. Esepcially since I’ll be undertaking this project here in the next few months

  • http://www.propertytaxrights.com Catherine H

    Although this article is helpful, the whole property tax system is rigged against the homeowner and every homeowner needs to know that before they go to fight their assessment.

    • http://www.moneycrashers.com david/moneycrashers

      Catherine

      I couldn’t agree more–I am fully aware that the odds are stacked against me.

      These people didn’t even want to give me the info on how I could go about disputing it.

      We’ll see what happens, but I’m certainly not holding my breath

      Thanks for weighing in

  • http://www.fatwallet.com Laura Pagles

    David, that stinks that they weren’t forthcoming with info.

    http://www.rrstar.com/news/yourtown/boone/x640866073/Learn-how-to-appeal-your-property-tax-assessment

    If you scroll to the last paragraph, you’ll see how the local realtor association offer free protest assistance last year. Our town’s typically not ahead of the curve. So I have to think there’s other cities with similar resources.

    • David/moneycrashers

      Laura

      You should consider yourself lucky.

      I honeslty feel that somebody at the assessor’s offcie would lose their job here if they ever printed something like that.

      The lady I spoke to acted like she didn’t even have the item to be bothered with me, and I guarantee you that I did not get all that I needed in order to dispute.

      Our county (and state) seem to be getting very, very creative these days in finding more and more ways to take money out of our pockets.

      It would be laughable if it wasn’t becoming so expensive!

      Great to hear from you…oh, and by the way, I love the swag!!!!!

  • http://www.propertytaxrights.com Catherine H

    There are movements afoot to get rid of the entire property tax system. It costs more than $180 million in Massachusetts alone to implement the property tax system. In SC they raised the sales tax by 1% and cut their property taxes in half. If a state raises it by 2 – 3% they can get rid of property taxes altogether. Too many property owners have sat idly by while they are being taxed to death on their property and paying money they DO NOT OWE. Most homes in the U.S. are over-assessed. This will not change until people speak up. There is a petition to sign for your state at propertytaxrights.com

  • http://www.propertytaxrights.com Jess Taylor

    There are movements afoot to get rid of the entire property tax system. It costs more than $180 million in Massachusetts alone to implement the property tax system. In SC they raised the sales tax by 1% and cut their property taxes in half. If a state raises it by 2 – 3% they can get rid of property taxes altogether. Too many property owners have sat idly by while they are being taxed to death on their property and paying money they DO NOT OWE. Most homes in the U.S. are over-assessed. This will not change until people speak up. There is a petition to sign for your state at propertytaxrights.com

    • David/moneycrashers

      Catherine and Jess:

      Great great stuff!

      You can be sure I already signed the petition and I hope that lots of our readers will too!

      Thanks for your contribution

  • Think about it

    I think you guys are really looking at the whole property tax system incorrectly.

    The tax assessors aren’t out to take your money and buy themselves a new car. They need the money to pay for required city services. There is a budget they need to meet. So, if you get your house’s assessment reduced, they will need to get the taxes from someone else’s property. It’s a zero sum gain. So, if you reduce your taxes on your home by $5k, they will need to raise someone else’s taxes to make that money back to pay for their budget.

    If you raise sales taxes, you may shift the burden of paying for government services to the poor since they may end up paying more.

    The concept is similar to the tax deduction of mortgage interest, health insurance, property taxes. etc. The federal government has a budget that it needs to meet. When people who own houses and reduces their taxes, the federal government needs to make that loss in revenue by raising the tax rate which will affect all the poor. Essentially, what these tax deductions really means that it’s a transfer of wealth from the rich to the poor.

    • David Bakke

      Hello there–

      That’s quite an interesting perspective, and I really appreciate you taking the time to add it to the conversation

    • Afl76

      Think @ it; do you pay little in property taxes, have lots of disposable income, or work for a municipality that is contributing to your perspective? I live in Nassau Cty, NY where the rate is one of the highest in the nation and (not only is it not sustainable) it is obvious from gov’t spending and budget gaps that little relief is in sight. The next generation is going to be able to support this level of taxation and neither will the Baby Boom retirees. Remember, we are only at the beginning of the Baby Boom generation retiring. Something such as higher sales taxes will probably be implemented b/c retirees will flee to lower taxed states, but I’m sure they will continue to keep property taxes high too (unless you are wise enough to file your grievance). Like a sales tax system, property taxes should reflect what you have paid for your property, but one citizen should not be repeatedly penalized for buying at the wrong time or making a bad decision, or even having poor negotiation skills. That is why re-assessments exist and that is why each citizen should have the opportunity to reduce their property taxes. As for the school taxes, if the school system is good and you have children, then I see nothing wrong with a tuition tax added to attendees bills…b/c then it is a sub-group of a community being taxed and they can unite and fundraise through different events to help lower the tuition or pay it if they don’t object.

      going back to the assessments, the current system does not encourage home improvements…if someone knows their taxes will go up via renovations, then why would they improve the value of their home? A flat rate for homeownership would open the floodgates to home improvements and increase the economy…something that would be well received. The offset in lower taxes can be made up in an increased transfer tax and possibly some form of amortizing tax rate that gets reduced the longer you own your home (i.e. a little higher at the start, but guaranteed to reduce over time – just like a mortgage). And that’s the American dream… the ability to invest and participate in an economy that rewards its participants. Boo to all those that are passively abusing NY’s rent regulated housing!

    • Hmmmmm…

      Why can’t government just spend less. The federal government didn’t even pass a budget.

  • http://www.propertytaxrights.com Jess Taylor

    It’s not that the assessors are out to buy themselves a new car – but they can and do lower their own assessments and that of their friends and family if they so desire. There is no meaningful oversight, especially for elected assessors and we have documented enormous corruption where their own valuations are ridiculously low and they go after newcomers (called “welcome stranger”) or just people they do not like to make up the difference. The system is built for corruption and needs to be abolished. Raising the sales tax by 2% can make up for property taxes easily. It’s a much fairer tax that is self regulating. Also property taxes are fast becoming an unreliable source of revenue due to the huge drop in home value. In many states sales tax revenues are rising.

    • http://www.moneycrashers.com David/moneycrashers

      Jess

      Thanks for commenting

      I think the key words in your comments are “no meaningful oversight” and “built for corruption”.

      Those phrases about say it all

  • Think about it

    Jess,

    I agree with many of your points but there are 2 points I want to bring up.

    1. Unfortunately, I think the argument for implementing a sales tax system is complicated by the fact that we have/need a progressive tax system – the rich are taxed at a higher rate than the poor. The property tax system achieves this because someone with a bigger house pays more taxes.

    I guess a good argument can be made that the income tax system is sufficient enough to implement any such lofty goals. Perhaps you are right but I don’t know.

    2. A system based solely on sales tax would also have some unfair qualities. How fair would it be if you own half the town, but because you do not make any income or you do not buy any goods, you pay very little? So would it be fair that society would pay for all the sewer repair, road repair, police protection, etc. for your little castle but you end up contributing little?

    In a perfect system, you pay for what you use. So, that when you drive down the road, you pay a toll that will pay for the maintenance of the road rather than the indirect method of property taxes. But, of course, this would be administratively horrendously difficult and expensive. I think property taxes accomplishes a pay-for-what-you-use system better than a sales tax system.

    I just see everyone complaining about how their taxes are so high…we need to lower the tax rate…but that’s not the problem. The problem is that the town itself is spending too much and must raise the tax rate to pay for all these expenditure. I guess I think it’s more important to figure out where our money is spent rather than the actual taking of the tax itself.

    Sorry for the rant.

    • http://www.propertytaxrights.com Jess Taylor

      I agree that taxes are too high due to overspending. Towns are run by incompetents and they spend tax dollars as if it is monopoly money. I DISAGREE completely however that property taxes are fair. They are not and for many reasons. A family of five with three children costs everyone thousands of dollars due to the cost of the school. Many towns are charged per school age child. A single person with no children can live in a large home and pay much more in taxes even though he or she costs the towns NOTHING. Not fair. Meanwhile the school budget can be more than half, sometimes 3/4 of the entire town budget. It’s outrageous. Sales tax is fair and self-regulating – you pay on what you CHOOSE to buy, and I think every little child needs to learn early on that, yes, they will be taxed on their bubblegum and toys. As for being taxed on a property value – nonsense – that’s like mercury in your hand. Assessors know it and the corrupt ones will jack up values for seniors knowing they are the least likely to contest it. Fair? I don’t think so. And as for the appeals system – it’s a joke. In one state the Appeals Board consists of six and only ONE has any experience in assessing properties. They are all appointees of the governor and rarely if ever rule 100% on the side of the homeowner.This whole system is one big corrupt nightmare.

  • Think about it

    Going back to property tax appeals. I wanted to add:

    If everyone is successful in their appeals, then nobody will get a reduction in their taxes. That’s because if everyone’s assessment is reduced by 20%, then the tax rate has to increase 20% to make up for the loss in revenue.

  • http://www.propertytaxrights.com Jess Taylor

    Okay, so your logic is what exactly? They claim that the system is based on fair assessments. It’s not. If they are going to continue this farce why not come clean and just tell the truth. “We will assess you at our WHIM, and we will get the money we want one way or another.”

    • David Bakke

      Jess, and Think About It

      I just want to interject that we at Money Crashers sincerely appreciate all of your fact-filled lively commentary. It is of great benefit to our readers.

      Thanks!

      • http://www.propertytaxrights.com Jess Taylor

        You are welcome. It amazes me how many people are so uninformed on this subject. Two new articles came out just recently about assessor abuse. ” The Adams County assessor has slashed millions of dollars from the taxable value of properties owned by the largest contributors to his election campaigns, a Denver Post investigation found.”

        And..

        “Elected officials in Jefferson Parish, despite their positions of influence and knowledge of government’s inner workings, generally get a smaller break on their home property assessments and tax bills than the average homeowner, according to a study by The Times-Picayune. Still, some politicians — including Assessor Lawrence Chehardy — have wide gaps in their property valuations.”

        The Atlanta Journal Constitution has done two thorough investigative pieces finding that assessors are valuing properties as high as they can get away with simply to bring money into the towns. It is not based on “market value.” So the conclusion is that assessors know that most homeowners are worse than stupid and they can rip them off accordingly. Property owners need to scrutinize their record cards, file their appeals and fight this unfair system in every legal way.

        • David Bakke

          Jess

          You are particularly on point on this one–as I am an Atlanta resident.

          I can assure you I’ll be digging into this one.

          Thanks again so much for your valuable feedback!!!!

  • JC

    What happens if the town “makes an offer” of reduced assessment but it is for more than the appraised value of the house by $20K (I had an appraisal done before the appeal)? Do I need to go to a hearing? Does the county “punish” people who dare question the local tax assessor by denying the appeal entirely?

  • http://www.moneycrashers.com David

    JC

    I would still appeal. As for your second question, you wouldn’t think so, but you never know.

    Thanks for commenting

  • Jon

    Regarding the perception that property taxes are less fair than sales taxes, I think it is a separable question from whether government spending is excessive. If we can assume that there is some amount of government spending which is necessary, and then ask ourselves how we wish to fund that necessary spending, we might identify a tolerable tax system.
    There are suggestions that it is unfair for a large family to burden the community with the education of their children. I believe it is a wise choice for the community to fund the education of the children who might otherwise burden them through crime. We could push the costs directly to the families of children or even the children themselves (I have friends who suggest children should take out private loans for their education) if we wanted to force them to choose between education and non-education. I believe we have decided wisely as a community to share this burden.
    If someone is able to enjoy a large home, I believe there are many community benefits they are able to enjoy, which they should pay for. I have heard sales tax called a “regressive tax” because we *all* must buy groceries, and the effective tax rate is higher for people who don’t have much more than grocery money. If sales-tax were the primary source of tax income, then wealthy individuals would enjoy a much lower tax rate precisely because less of their wealth is spent on consumable taxable items.
    If we agree that there is some baseline level of necessary government spending, then we can discuss changes to the tax system which affect *who* taxes come from rather than “how much taxes must I personally pay”. Viewing the tax system through this lens, I think property taxes are an effective way of distributing the tax burden, with wealthier individuals carrying a proportionally higher responsibility.

    • Laserman2020

      How about progressive income taxes then? That would be a tax based on wealth, or even better “ability to pay”. You can not sell off your living room to pay your property taxes. Seniors here are getting taxed out of their houses…..I know it’s easy to say “move”.
      Fortunately my house is paid for, and I have a decent income, so I can afford the $4000 in taxes on my modest home. As I approach retirement, I am looking for a house in a community with a much lower tax rate. The nearest city has a rate 50% higher than mine, and they are driving people out to the suburbs, while their debt skyrockets.

      • Laserman2020

        Just an update…I appealed my assessment this year, and was successful in getting it reduced by over $70,000. This will put $800 into my pocket. Makes up a little for the 42% year over year increase I had 4 years ago….

  • Helen

    I recently had a revaluation done in my properties in NJ. Both properties are in different towns and counties. The first property I got a $68,000 reduction and the second a $21,500 reduction on the market value of the house. Remember a reduction is good for the taxes but not for resale. However when you sell, it will be based on what properties sell in your area anyway. I am concerned with the immediate impact on my taxes.

    What I did in both cases, was map out my comparables with the Townships comparables. The comparisons included information such as the lot size, the number of bedrooms, whether it was a shared driveway or not, the garage size for one or two cars, room sizes, the number of bathrooms, whether it was on a busy street, flood zone, etc. You include what is particular to your home and area. The townships comparables in my case were for three homes in the area which were for lot sizes which were much larger than mine and included huge driveways, If you ask me, they were poor comparisons. My house lot size was smaller and I have a shared driveway, in this particular property.

    What I did exactly was, I first mapped out my home and my comparables and then mapped out the township’s comparables and highlighted the points and areas in my favor in an Excel sheet.. I also wrote down notes in the same sheet at the bottom stating and justifying exactly why I should have a reduction. To give you one of the examplesI cited was “that all the homes, including my comparables and the township’s comparables had their own driveway while I had a shared driveway.”

    I handed a copy of this sheet to the 4 committee members. I am sure they will never forget me because I came so well prepared. I heard back from them a few weeks later and received a huge reduction on my property taxes. In both cases, I got the results I wanted. It takes some time, it took me approximately 5 hours to analyze everything. You may need to go to a Real Estae office to get some comparables. In my case, I have my salespersons license, but remember they have a cut-off date for the comparables so you can’t look at your neighbors property, if it sold two years ago. In fact, if your revaluation is about to take place, look out for properties selling n your immediate area so you can find it in the internet and not have to go to a Real Estate Office or drop in during and Open House and get the fact sheet information on the home. This will help you for comparable purposes, and look out for features that your home does not have, remember it counts if your house has not been remodelled in years.

    One final note, when a revaluation is done, you will receive an initial determination of what they think your property is worth. That paper provides loads of information of your property and you can use the information against the comparables.

    • Davidbakke

      Helen

      First, I would like to sincerely thank you for taking the time to share your story. Second, congratulations! Your story should certainly provide others the motivation to follow your path, and hopefully achieve the results that you did. I think the key here is to do exactly what you did–come prepared. Do the required research and you’ll have a much better chance. And I am quite sure that you view the five hours you spent on the project as time very well invested.

      Thanks again for commenting.

  • Laserman2020

    I have owned 2 houses, and got a tax reduction on both of them. Since I had bought them both at prices significantly lower than their original prices and assessments, I successfully argued that since the houses had been for sale for a significant time, the prices I paid must have been a fair indication of market value, because many other potential homebuyers had had a chance to consider them, and passed.
    I do have a problem now, though. 4 years ago the assessment on my house went up 42%, from 175k to 252k. I appealed but the assessment was upheld. Now I’m up to 335k. It’s nuts! I’m putting together an appeal, but have no idea what to expect. My house would never sell for its assessed value. I am thinking of offering it to the provincial gov’t, or putting it up for sale at its assessed value to prove my point.

    • Davidbakke

      Thanks for sharing your story–our readers will appreciate it!

  • Sssssssup

    my 400.00 apraisal was worthless because apraisers use forclosures as comps. as well as the rest of the financial world. it reviewing your property taxes only non-forclosures are able to be used to compare to your property to evaluate tax basis

    • Davidbakke

      Good point, and thanks for sharing.

  • Alla

    I successfully appealed and reduced the assessment value of my house in NJ by 20%. I thought that the new tax bill, that we usually receive in July, will use a new assessment value, but it still has the old one. I want to know when the new assessment will be in effect? Starting what year my property taxes will be adjusted, the year I appealed or the next year? Tax collector told me that it happens only next year, is it true? I’m confused about the process after appeal. When will I see changes in my bill. Will I receive any refund for this year?

    • Davidbakke

      Call back and speak with a different tax collector or ask for a supervisor. They should be able to clear it up for you.

  • G wagner

    I have been incorrectly essesed as a rental . I lhave lived here for the past 5 yeras. They will not talk to me and I have been bounced back and forth between the Assessor’s off and the county treasuerer’s office pointing the finger at each other. I have a print out from their office indicating this as my Primary residence. They say it is impossible and yet refuse to allow me to appeal. ANy thoughts.

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