Challenging Your Property Tax
The National Taxpayers Union estimates that as much as 60% of taxable property (i.e. your home) is over-assessed. However, very few individuals ever protest the assessment and as a result, many may be paying more property tax than necessary.
Tax authorities attempt to base your property tax as closely as possible on the current market value of your home. In fact, you may have received a letter from your county auditor recently, assessing the current value of your home. The good news is that you have the right to contest your property value. Furthermore, it isn’t as difficult as you might think. In fact, some estimate that over 50% of those who contest their property tax are successful.
According to financial authors Harry Koenig and Bob Lafay, lowered property taxes are the direct result of lowered assessed values. The assessed value is the amount of money the tax assessor thinks your property is worth. This is the only instance where a tax is based on an opinion of someone who has often times never stepped foot into your home. You have the ability to voice your opinion and present a compelling case to lower the assessed value of your home.
So, other than a desire to cut expenses, how do you determine why and when you should appeal your assessed value? The two most common circumstances are:
- Your home’s assessed value is overvalued relative to similar houses in the neighborhood
- An error exists in your tax records
With the implosion of real estate, you may find yourself in the ‘overvalued’ category. Fortunately, this is the most common and most successful grounds for contesting your property tax bill. If you think this is the case, you first need to objectively determine the value of your home.
Arm yourself with comparable property values, ideally of homes that have been sold within the last 6 months. If you find searching the internet for appropriate comparables tedious, consider soliciting the help of a real estate agent. If you think your home is too unique to rely on comparable property data, consider hiring a real estate appraiser. The few hundred dollars of fees could easily translate into hundreds, if not thousands, of dollars in property tax savings.
The easier of the two circumstances is to check your tax record for errors. Simply visit your county auditor’s website. Examine the information for errors. Is the number of bathrooms correct? Is the square footage accurate? Is a non-existent home addition listed? Often times, such errors are corrected with a simple phone call to your county and result in a reduction in property tax.
Don’t sit helplessly watching your tax bill rise every year. If you feel you can tackle this on your own, you should contact your county auditor. If you would like our assistance, please call our office and we will be glad to assist you.