When Adam Jusko, founder and CEO of the personal finance website ProudMoney.com, and his wife saw the assessed value on their home in Lakewood, Ohio, a few years ago, they were surprised by how much the valuation had increased from the previous year. “We knew that if that valuation stayed, our tax bill was going to go up significantly,” Jusko says.
[See: Answers to 7 Burning Tax Questions.]
When the couple started looking at the assessed values of nearby properties, which is public record in many cases, they discovered that the house next door had more land and similar square footage, but the owners paid less in property taxes. So, Jusko and his wife mailed in documentation to appeal their property’s assessed value and lower their property taxes. “We did not get the taxes reduced to the level we asked for, but we got them reduced significantly from what our county was suggesting,” Jusko says. They could have appealed further, but were satisfied with the outcome since that valuation would lower their taxes that year and going forward.
As home values rebound in many real estate markets across the country, homeowners may encounter a less appealing byproduct of property appreciation: higher property taxes. If your home’s assessed value isn’t accurate, you can hire a firm to appeal the assessed value on your behalf or file an appeal yourself.
The appeals process varies depending on your local jurisdiction, but generally here’s what homeowners should know about appealing their property taxes and smart steps to take as you’re going through the process.
Find out what assumptions the assessor used. Assessors typically use a process called mass appraisal, which relies on records rather than a physical inspection of the property. “Sometimes there can be changes to a home that an assessor isn’t aware of,” says Jim Amorin, president of the Appraisal Institute and vice president at Atrium Real Estate Services in Austin, Texas.
First, look into what information the assessor used to value your home. You can get a copy of the property record card, which is used by the assessor to validate your property’s assessed value, from the assessor’s office. Amorin suggests making an appointment to talk to the assessor. “Go in and talk to the assessor and help them understand the condition of the property,” he says. “Maybe the assessor rates it as being in excellent condition and it’s really not.” For example, if you think the assessor made a flawed evaluation of your home’s condition, you could bring photos of cracks in the foundation of your home or water damage to discuss these issues with the assessor or have a professional do it for you.
In other cases, inaccurate records could be the culprit for a faulty assessment. For instance, if the records contain more bedrooms or bathrooms than you actually have or a larger lot size, then this could impact the home’s valuation, says Pete Sepp, president of National Taxpayers Union, a nonpartisan citizen group. Or, if you have a screened-in porch with no heating or cooling, but the assessor considers that square footage as part of your dwelling, that can also inaccurately inflate your home’s value.
In rare instances, if the assessor has incorrect information that causes your property to be under-assessed, an appeal could actually trigger higher property taxes once inaccurate information is updated. If you discover that the assessor thinks you have fewer bathrooms or less square footage, appealing the property’s value might not save you any money.
Look for comparable properties. If the property card is accurate but your assessed value still seems high, find out the assessed value of similar properties in your neighborhood to see if you’ve been comparably assessed. In Jusko’s case, he was able to lower his property taxes by arguing that his home was not comparably assessed by showing data on similar properties in his area.
[See: 7 Most-Missed Tax Deductions and Credits.]
In some situations, your home might be compared to other properties when it’s not really comparable. For instance, if you live in a neighborhood with homes of similar size and age, “but your home is the only one that’s built at the bottom of a drainage area that overlooks the railroad tracks, you shouldn’t be comparably assessed,” Sepp says. “Yours should be lower.” Or perhaps the assessor compared your home to houses that are newer or in better condition.
Consider hiring an appraiser for more complex cases. If you uncover inaccurate information or a clear-cut example of why your home isn’t comparably assessed based on the data you’re able to gather, that could be enough to make your case. Hiring a professional appraiser might be able to help in more complex cases.
“If you have a distinguishing characteristic that should make its assessment lower, an appraiser can provide an expert opinion,” Sepp says. For instance, an appraiser could state with authority how much a drainage problem or other issue should impact the property value. Jusko and his wife hired an appraiser for a previous property tax appeal and recouped the cost of the appraisal in the tax savings they received during the first year or two.
According to Amorin, an appraiser might charge a flat fee for simply doing an appraisal and an additional hourly fee if you want them to actually go to the assessor’s office and negotiate for you. In one case, a homeowner purchased a property without realizing it was in a floodplain and the property flooded several times. The homeowner hired Amorin to help sue the title company for missing that fact and also get the assessor to lower the property value accordingly. Photos of the damage helped make a compelling case for a lower property value.
Stick to the facts. If your local jurisdiction requires you to argue your appeal in person, do not bring your metaphorical soapbox or get emotional. “You should view this appeals process as something close to arguing an unfair traffic ticket,” Sepp says. “You would not go into traffic court citing your constitutional rights as a citizen and going on about corruption in local government or using this as some kind of political theater.” Focus on comparable properties, errors the assessor may have made or other facts.
[See: 10 Ways to Reduce Your Housing Costs in Retirement.]
In addition to appealing your assessed value, you might also look into applying for a homestead exemption, which removes part of the property taxes on your primary residence. Eligibility varies by jurisdiction and some jurisdictions offer higher exemptions for seniors or disabled veterans or civilians. However, Sepp says not everyone can qualify for these exemptions due to income or other restrictions. “That doesn’t mean you should ignore them, but I’ve always told homeowners: don’t get too optimistic that you’ll qualify,” he adds.
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How to Appeal Your Property Taxes originally appeared on usnews.com
