How to appeal your property tax assessment

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Property taxes
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Think your property tax assessment is too high? The property tax appeal process is easier than you may think!

I recently appealed my property taxes and the whole process only took about 30 minutes. I want to share my experience to let you know how simple it can be.

A look at the property tax appeal process

The rules for appeal vary by jurisdiction, but there are many commonalities no matter where you live.

In most cases, the appeal process begins with you filing out paperwork at the property tax assessor’s office. This is your chance to state what you believe the real value of your home to be, if you believe that the assessor thinks it’s more than it’s worth.

Other grounds for appeal may involve issues of uniformity (you feel your home and a similar home are being taxed at two very different rates); taxability (usually applies to corporate entities); exemption denial (homestead exemption may or may not be a thing where you live) or breach/denial of covenant.

Here’s how to go about it:

1. Look at your annual notice of assessment

The key piece of info you’ll want to take note of is the year-to-year change in your property’s appraised value. You can see this year’s value in the shaded area below. Right next to it, you’ll see last year’s value.

property tax appeal

In my case, the appraised value jumped from a previous year fair market value of $120,520 to a current year fair market value of $142,950.

That’s an increase of $22,430 — that’s a nearly 19% rise in a very short period of time!

When I first got this assessment in the mail, I thought that was crazy. As I went through the property tax appeal process, I came to find out that it wasn’t as far-fetched as I’d believed. Still, because I felt my house was being overvalued based on the recent sale of similar homes, I filed an appeal.

2. Get a hold of the most recent comps

In real estate lingo, “comps” means sale prices of homes that are comparable, or similar, to yours. Some people like to look at comps on the web. That’s all well and good, but I prefer to go in person to my Board of Tax Assessors to see what recent comps they’ve got on file.

After all, the buck stops with the tax assessor, right? I want to be sure I’m looking at the same data they are when deciding if an appeal of the appraised value of my home is warranted.

If you bring your annual notice of assessment to the Board of Tax Assessors, they should be able to pull the comps for you.

Here are the comps that the tax assessor pulled for me. The report is labelled “Residential Comparable Properties Report for 2018” and reflect the most recent 2017 sales in the subdivision of my neighborhood.

property tax comps

I’ve highlighted the two most important pieces of info you’re looking for: The square footage and the sale price.

I live in a HOA covenant community where all of the attached townhomes essentially look the same on the outside. It’s very cookie cutter and there’s precious little to distinguish one townhome from another. That’s why square footage is particularly important to me. I want to know the most recent sale prices of homes that have the same square footage (1,386 sq. ft.) I do.

If I can demonstrate a trend of homes that are 1,386 sq. ft. in my neighborhood selling for less than my current year fair market value ($142,950), then I feel I have sufficient ground to go through the property tax appeal process based on value.

You’ll want to make sure the comps you’re looking at offer a real apples-to-apples comparison. That means finding properties with a similar bedroom/bathroom count as yours, similar square footage and similar property acreage.

3. File your property tax appeal

If you decide you want to go through with an appeal, there will typically be a form you can fill out either online or at the office of your Board of Tax Assessors.

It’s simple to fill out. I’ve now done a property tax appeal twice since buying my home. Each time, I’ve only spent a few minutes sizing up market conditions and values based on comps and then filing out the necessary paperwork to explain why my appeal is warranted.

Here’s what my form looked like after I turned it back in to the Board of Tax Assessors.

You can see I challenged my assessment based on value and I had to provide an explanation of my specific reasoning:

property tax appeal filing

In case you can’t read my handwriting, here’s what I wrote:

“The 2018 comp report indicates three properties in our townhome community being sold for $140,000 or less. These three properties are the same square footage (1,386 sq. ft.). I have made no material upgrades to warrant a higher valuation.”

Just to play devil’s advocate for a moment, you could argue that there are also two homes of the exact same square footage in my neighborhood that sold for higher ($148,000 and $152,000) than my current assessed value ($142,950).

But I believe those are outliers. I think the three 1,386 sq. ft. homes like mine that sold for $140,000, $140,000 and $139,700 are more the rule, not the exception.

Of course, working from a sample size of only five recent comps, it’s anybody’s guess as to if the assessors will agree with me or not.

My last property tax appeal during the Great Recession was approved without any difficulty. The reality at that time was that the county had been using outdated comps that reflected boom-year sales, before the housing bust. That was a no-brainer.

We’ll see how well I fare this time. I’ll keep you updated with a follow-up once I hear back from the Board of Assessors.

What happens next?

After you file your appeal, you should be prepared to wait. You’ll typically get a letter in the mail acknowledging that your appeal has been received and letting you know when a decision will be made. If you uncover additional evidence to bolster your case, you can provide it during this time.

When you do eventually get the final decision, there are a few possible outcomes. The assessors could agree with you and revise your value down. If that’s the case, all is good. You’ve accomplished your goal and you’re done.

If you get a letter of denial for your appeal, you can either let your appeal die then and there or you can go through a more formal process in which you appear before a board of your fellow taxpayers to press your case.

That formal process is called going before the “Board of Equalization” where I live. The board is made up of three homeowners in my county. Each board member must go through a minimum of 40 hours of training to be able to understand home values and market conditions and to hear appeals.

There’s no fee to go before the board, by the way.

property tax appeals process

A couple of words of advice about going before a board of equalization…

  1. Never gripe about the government at any point during your hearing. Nobody wants to hear about how you think your hard-earned tax dollars are being poorly spent. Just present the facts about recent sale prices of homes similar to yours.
  2. Consider dressing business casual for your hearing date. The idea is to dress nicely, but not too well. People will hopefully respond to your appearance on a subconscious level.

If, after going through that formal hearing process, you still don’t get the outcome you want, you can consider going to your county’s Superior Court for a jury trial.

If you’ve reached this stage, you probably mean business — and you should prepare accordingly. Consider hiring an attorney who deals in property tax issues. As the appellant, you’ll be responsible for paying a nominal court filing fee ($25 in my county) in addition to paying your attorney.

A few final thoughts about appealing your property taxes

There are a lot of reasons why you may want to appeal your property taxes.

A woman I met at the Board of Tax Assessors in my county told me she was appealing because the increase in taxes made her mortgage payment go up by $100 a month.

“Never again,” she said ruefully, as she shook her head and looked at me.

I feel your pain, I told her. Any homeowner who wants to stay put and isn’t looking to sell feels it, too. A sudden rise in valuation could bump your mortgage unexpectedly. This would likely happen if your mortgage holder keeps money aside each month in escrow to pay your property tax bill.

Of course, the flip side of a rise in housing values can be great — especially if you’re looking to sell your home because of a job move or because your family has outgrown its current residence.

In my situation, my housing needs are modest, and even though most people would call our townhome a “starter home,” it’s still working for my family and me. We’re planning to stay put in our starter home for the long haul, as in forever.

Sound crazy? Well, maybe it’s crazy like a fox, as money expert Clark Howard would say.

Consider this: Staying in your starter home is one of five things this 33-year-old retiree did to become a millionaire in 10 years. And no less a financial wizard than Warren Buffett is still in his starter home. The “Oracle of Omaha” bought his current home in 1958 for $31,500!

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Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the #1 New York Times bestseller "Living Large in Lean Times."
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