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Challenge Your Property Tax Assessment

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With the real estate market in the doldrums and prices falling, many homeowners want to put a lid on their property tax assessments. Yet struggling local governments aren't in any hurry to mark down assessed values, especially in an area hit hard by the downturn. If you're in sticker shock over your recent assessment, here's a quick lesson on what to do about it.

Talk it out
If you disagree with your tax assessment, your first recourse may be to discuss it with your assessor directly. Point out any facts your assessor may have overlooked, taking care to maintain your cool. Your assessor may concede or be willing to negotiate, at least agreeing to a reduction in your assessment. Some jurisdictions don't allow any informal discussion of your assessment, however, which means that you'll have to air your complaint via a more formal process.

Learn the process
To register a formal complaint, contact your city or county real estate assessment office directly. They can outline the appeals process and give you the information you'll need to lodge your formal protest. Be sure to ask:

  • Is there a deadline for filing? (For some jurisdictions, the clock begins ticking when your property assessment is conducted; you may, for example, only have 30 days from that date in which to appeal.)
  • What paperwork needs to be completed on behalf of the appeal?
  • How much, if anything, does the appeal cost?
  • Will you need to attend an appeal hearing? If so, when?

Gather your evidence
Most successful appeals are based on one of two arguments: (1) there are errors in the assessment that led the assessor to overvalue your property or (2) based on comparable homes in the area ("comparable" typically means same square footage, neighborhood/general area, and age), your home was overvalued.

To prove the assessor made a mistake in your assessment, you'll want to look at:

  • The facts reported about your home -- the square footage, number of bedrooms, type of heating and cooling systems, etc. If your assessor overestimated the finished square footage of your home or counted a half bath as a full bath, for example, you may have a good case for a reduction in your property assessment. Check for simple mathematical errors that could misrepresent the size or value of your home.
  • How any changes you've made could negatively impact your home's worth. If you, for example, tore down a wall to make two small bedrooms into one larger space, you may actually have decreased your home's value.
  • How community changes have decreased your home's desirability. For example, if a paper plant has just been built across the street from your home, you could argue that its proximity has decreased your home's worth.

Stick to the facts
A strong case for reassessment involves facts, not just opinions. Your rant about the housing bubble is less likely to change your assessor's mind than your analysis of how your home compares with your neighbors'. Because details are crucial to your case, you may want to enlist the help of a real estate agent familiar with your neighborhood who can run the comps (on at least five other residences) in exchange for a fee. If you prefer to save the money and don't mind some legwork, you can do a search for information on comparables at the assessor's office. In fact, nowadays many jurisdictions have online databases that you can search from the comforts of home.

State your case
Once you've been assigned a hearing date, you'll want to get busy organizing your presentation. Data (in the form of photographs of comps, a spreadsheet comparing your property with others in the neighborhood, and supportive documentation) is critical to your case and should be well-organized and to the point. Consider attending someone else's hearing to learn what to expect; you may make some good observations about what to do (or not do) in making a strong case for reassessment.

Even if the hearing doesn't go in your favor, you may still have some recourse. Some jurisdictions have an appeals process; for others, the hearing may be the last stop before bringing your case to court. A court case can be time-consuming and costly, well exceeding the tax savings you would incur with a lowered assessment. A better choice might be to spend the year gathering up more evidence, so you'll be prepared with a more compelling case following your next assessment.

For more on handling the housing crisis, read about:

This article was originally published on Jan. 20, 2007. It has been updated.

Fool contributor Elizabeth Brokamp is a licensed professional counselor who regularly talks money with her honey, Robert Brokamp, editor of The Motley Fool's Rule Your Retirement newsletter.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 19, 2008, at 5:56 PM, MarketAdvice wrote:

    This article is great and it definitely will move you in the right direction but if you have any direct questions, I emailed Prop8.ORG and they were very informative in regards to my property taxes. Just a little tip for fellow Foolish Readers.

    MarketAdvice

    www.prop8.org

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