The Property Tax Appeal Process: 4 Steps

There are many costs associated with homeownership, including annual property taxes. While an expected expense, what if they become too expensive? Many homeowners are often surprised to learn options exist for appealing property tax assessments, although where to start varies by city and state. Below is a high-level overview on how to start the property tax appeal process and potentially reduce the amount you pay.

How To Evaluate Your Property Tax Bill

There isn’t a “one-size-fits-all” calculation for property taxes, but homeowners can come up with their own rough estimate of how much they’ll owe by taking their home’s assessed value and multiplying it by their local tax rate, which can easily be found online or by looking at last year’s property tax assessment. Don’t worry about how and when you’ll be notified – the “assessment notice” gets delivered directly to your property address via mail.

For example, if you have a home valued by the tax assessor at $300,000 and your local tax rate is 1%, you’ll owe $3,000 to your local tax commissioner's office that year. As a note, fair market value does not always equal assessed value. Many local governments do not tax property ownersat the fair market value, but rather at a designated percentage of this value.

Your home’s assessed value is determined by the local tax assessor who comes out once each year to evaluate the condition of each home in their district. Homeowners then receive a property tax assessment based on the tax assessor’s valuation. The need for a dispute or appeal of the assessed value arises when there is a discrepancy between the assessed value, and what the homeowner believes the value to be.

Property taxes on a home can dramatically increase from year to year for a variety of reasons: significant improvements or renovations to the home, overall increases in the neighborhood property values, or changes to government policies that dictate tax raises in your area.

How To Protest Your Property Taxes

1. Assess Comparable Properties

Fortunately, homeowners who believe their assessed value is higher than it should be do have the option to appeal the decision but must do so in a timely fashion. Homeowners should start the appeals process by evaluating the “comps” of similar homes in their area.

To ensure an accurate valuation, appealers can do one (or more) of the following:

• Work with a real estate agent to run comparable sold properties in your area
• Speak with their neighbors about their assessments
• Research recently sold properties in the area on your own. Most local governments have a tool to search public records online, and this can assist a homeowner in finding the tax assessments for homes in your area.
• You can hire a certified appraiser to evaluate the fair market value of your home, but this can be costly, as many appraisers charge hundreds of dollars for their services.

This research is important because in order to have their home reassessed, homeowners must prove one of two scenarios: their assessment is much higher than the neighbor’s, or the comparable houses are nicer and therefore their assessment should be lower in comparison.

2. Contact The Assessor’s Office

As the property owner, it is within your right to inquire about how the tax assessor arrived at their valuation, and many assessors are more than happy to discuss their valuation via phone.

Homeowners who are not satisfied with the explanation at this stage will most likely opt to move forward with the formal appeal.

Depending upon your location, an attorney may be able to assist with the property tax appeal process, although this is costly and not necessary. An appeal is something a homeowner can easily do on their own if they are willing to put in the time.

3. Appeal To The Local Independent Board

Again, while the process can vary between city and state, here is how the property tax appeal process typically works:

• A homeowner pays the small filing fee (usually $50 or less) and files the formal appeal.
• There will be paperwork to fill out and the homeowner must provide supporting evidence and documentation as to why they are appealing the property tax assessment.
• Once documentation is submitted, the local board reviews the appeal.

While homeowners are made to file an appeal in a timely fashion, the decision-making time varies based on the local board and can take several months or up to a year.

4. Receive The Appeal Decision

Winning an appeal will not lower your tax rate. All property owners in the district are charged the same amount and this is changed at the local government level. If the board approves a homeowner’s appeal, however, this means they agree to decrease the assessed value of your home, which is how to get a lower property tax amount.

In addition to appealing your assessment, homeowners should spend time looking into property tax exemptions as a way to decrease property taxes.

As a note of caution, an appeal could cause a homeowner’s assessment and property taxes to increase if the board finds your documentation actually supports a higher valuation of your home. While this is rare, a more likely scenario is that a lower property tax assessment could hurt the fair market value of your home in the event you decide to sell in that same year.

Things To Consider Before Appealing Your Property Taxes

In order to maximize both your time and efficiency, the following questions should be answered before attempting to file a property tax appeal.

Has The Deadline To Appeal Passed?

The amount of time granted for property tax appeals varies by local and state government, however the typical timeline is 30 days. Procedures for filing and the important dates are included in the assessment letter. Of all the steps in the property tax appeals process it is most important to pay attention to these dates as any delay or missed deadline could result in your appeal not moving forward.

Is The Property Assessment Data Accurate?

Before filing, double-check the assessment letter for any property errors. Homeowners should first double check facts such as square footage, number of bedrooms and bathrooms, lot size, and the legal description to ensure accuracy. If any of these numbers are incorrect, winning the appeal becomes highly likely.

Are The Savings Worth The Appeal?

Your time and efforts do have a dollar value. There are also expenses incurred by homeowners appealing property taxes, such as filing fees, costs of accessing public information, hiring an appraiser or attorney’s fees (if applicable). When weighing all of this out, are the potential savings worth the appeal?

Potential savings may be greater in states that have higher property tax rates or higher home prices. Also, if you’re planning to outsource the appeals process to a licensed attorney, it is best to weigh the costs and benefits of appealing. After factoring in fees, will you still save money?

The Bottom Line

When it comes to a property tax appeal, there is actually little downside.

• If you win your appeal, you save money and pay less in taxes, if you lose, you’ll still have to pay.
• As property taxes are the funds used to finance schools, hospitals, and roads in your town, there’s really no way around not paying them, and no matter what amount you pay, you receive the benefit of the public works.
• At minimum, every homeowner should be familiar with their town’s property tax assessment process: how tax assessments are prepared, as well as how property taxes are used within the community.

Even if you do not need to currently file an appeal, since homes are assessed on an annual basis, there is always the chance your home’s assessed value could significantly increase in future, particularly as home values continue to rise.