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How to Appeal Property Taxes

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As a homeowner, you know that property taxes can be a burden, especially if you live in an area where they're particularly high. And if you've lived in your home for quite some time, you've probably seen your property taxes climb through the years.

The good news is that you don't need to resign yourself to costly property taxes. Rather, you can appeal your property taxes and possibly get them lowered in the process.

How to challenge a property tax assessment

The process for appealing property taxes varies from state to state and can also vary from county to county within the same state. But one thing you should know is that when you appeal your property tax bill, you're arguing that the assessed value of your property is too high.

Your property taxes are calculated by multiplying your home's assessed value by your area's tax rate. You can't argue your area's tax rate, but you can take steps to prove that your home isn't worth as much as your assessor thinks it is. If you're successful, you'll lower your property tax bill.

Once you receive your home assessment or tax bill, you'll usually have a predetermined window to appeal. The number of days you have depends on where you live and it could be anywhere from 30–90 days. Figure out your deadline for filing an appeal so you don't miss it. If you do, you may need to wait at least a year to have a shot at lowering your tax bill.

From there, you'll need to file the appropriate forms to start the appeal process. These can generally be found on your city, township, or county's website, and you may have the option to submit them electronically.

Be aware that there are often fees associated with appealing your property taxes, and they can vary based on the value of your home. You're generally required to pay those fees up front, and you don't get them back if your appeal isn't successful. Depending on where you live and your home's value, you could pay as little as $10 or as much as $100.

When filing your property tax appeal, you'll need to explain why you feel your assessed home value is too high. To this end, you'll need to do two things.

First, you'll need to verify that your local tax assessor has the right information about your property on file. If your home is listed as having a finished basement when, in fact, it doesn't, your assessment is likely to be off. Indicating that this information is wrong could be enough to get your home value lowered.

Next, you'll need to dig up details on comparable homes in your neighborhood to prove that your home has been overvalued. Imagine that your assessed value is $290,000. If seven similar homes in your neighborhood recently sold for $250,000–$270,000, that's a good argument in your favor.

Attending a property tax hearing

In some areas, you'll file your property tax appeal online, in person, or by mail and wait for a response. You'll only attend an in-person hearing if your appeal is denied.

In other areas, you'll have to attend a property tax hearing to finalize your appeal. You'll file your appeal with a few lines of supporting documentation to back up your claim and be assigned a hearing date to discuss the matter in front of a judge.

If that's the case, don't be intimidated. Generally, in these hearings, you'll be called to present the information you gathered in support of a lower home assessment. At that point, you'll either provide evidence of erroneous information on file about your property (for example, pictures of a basement that's clearly unfinished when your assessment includes finished underground space) or present the data you collected on comparable home sales in your neighborhood.

Your tax assessor, or someone from the tax assessor's office, may present a counterargument. They could argue, for example, that your home is more updated than the similar ones that just sold in your neighborhood. Prepare for that possibility.

Keep in mind that if you do choose to file a property tax appeal, the worst thing that can happen is that you don’t get your taxes reduced. Your tax bill can’t climb as a result of your appeal.

Should you bother appealing your property taxes?

If your home is significantly overvalued, appealing your property taxes could save you a substantial amount of money. But if you're only talking about a hundred dollars or so in savings, the appeals process may not be worth your time. Especially if there's an automatic hearing involved that causes you to miss work and lose income in the process.

Imagine your home is assessed at $200,000 when you feel its value should only be $195,000. If your local tax rate is 2%, you're talking about a $100 difference in property taxes over the course of a year. If you'll pay $25 to appeal your taxes and will lose out on half a day's income to appear in court, it may not be worthwhile even if you're positive you can prove that your home has been overvalued.

On the other hand, if your home is assessed at $250,000 when you're convinced it's only worth $200,000, that's an extra $1,000 in property taxes you're looking at, assuming that same 2% rate. In that case, going through the motions makes more sense.

One final thing: Many people assume they need to hire a lawyer to appeal their property taxes, but that's not true. While an attorney may be willing to take your case and only charge you if he or she is successful in lowering your tax bill, that lawyer will take a cut of your savings as compensation. If you're not keen on giving that up, you're better off going through the process yourself.

Furthermore, an attorney generally won't take your case unless there are major savings to be reaped -- otherwise, it's not worth his or her time. So don't be surprised if you seek legal help but are turned down.

If your property taxes have been going nowhere but up, it pays to look into filing an appeal. Just make sure it's really worth your time to go through that process before diving in.

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