Contesting Your Property Tax Assessment
As a proud member of the CPA community—the “Cheapest People Alive”—there’s a special kind of joy in successfully contesting a property tax assessment. When an opportunity to save money presents itself, especially one that requires proving my home is worth less than what the county claims, I’m all in.
Yet, I’ve encountered a curious argument against contesting property valuations that always makes me scratch my head. The reasoning goes like this: “If I argue my home is worth less than the county’s assessment, I’ll hurt its future sales value.”
While this may seem like a logical conclusion, I’m happy to report that it doesn’t work that way.
The County’s Motivation vs. Your Motivation
First, let’s consider the county’s motivation: to increase the amount of real estate taxes you pay. To do this, they assign a higher assessed value to your home. They wave a magic wand and claim, without stepping foot inside your home, that it’s now worth more than it was last year.
Now, what’s your motivation? Let’s be honest, you likely have two seemingly opposing motivations:
- Minimizing your tax burden: While you own the property, your goal is to pay the least amount of real estate taxes possible. How is this achieved? By keeping the county’s assessed value of your home as low as you can.
- Maximizing your home’s market value: When it comes time to sell, your goal is to get the highest possible price for your home. This is the home’s potential sales value.
Does the county’s assessed value govern your potential sales value? No. The assessed value is simply the county’s estimate for tax purposes. Buyers, on the other hand, base their offers (the sales value) on factors like comparable home sales, the condition of your property, location, and current demand. Much of the value of your home is based on in person assessments. In other words, interested buyers will do something that the county assessor does not–they physically walk through your home!
In conclusion, reducing the county’s assessed value doesn’t impact your ability to sell your home at market price. In fact, a lower tax burden might even make your home more appealing to potential buyers!
Tips for Successfully Contesting Your Property Tax Assessment
If you’re ready to challenge your property’s assessment, here are a few tips to improve your chances of success:
- Request a copy of the assessment: Review the county’s assessment report for errors. Look for mistakes in square footage, the number of bedrooms or bathrooms, or other key details.
- Gather comparable sales data: Collect information on recent sales of similar homes in your neighborhood. Look for homes with similar square footage, features, and condition.
- Document flaws and repairs: If your home has issues like a leaky roof, outdated plumbing, or other repair needs, document them with photos and repair estimates.
- Check for market trends: Research your local real estate market to see if values have decreased or remained flat, or if homes remain on the market for a longer period.
- File your appeal on time: Deadlines matter! Ensure you meet the timeline for filing an appeal.
- Consider professional help: A formal appraisal by someone who physically inspects your home is certainly hard for an assessor to ignore.
The Bottom Line
Arguing for a lower property assessment is about saving money now, not devaluing your home later. With the right preparation and understanding, you can reduce your tax burden without affecting your home’s future market value. So, don’t let misconceptions stop you.