Each and every year for eternity, homeowners await a dreadful day in the tax world. This is the day that annual property tax notices arrive, notifying homeowners how much money they’ll forfeit to their municipality (could be plural, also), in order to continue living in their home. Yes, that’s right. Not only do you pay interest on that mortgage, but you also pay the county for the right to live in the home. How can anyone argue with such a wonderful tax (heavy sarcasm implied).
If you take a look below, you can see how your state stacks up in terms of property taxes, or lack thereof.
What to do when you receive the notice
Most people don’t know where to start with property taxes. It’s not because you’re dumb or anything, but because municipalities make the process hard to understand. Because of this, hardworking Americans will accept the tax bill without so much as a blink. Don’t do this. Fight for what is rightfully yours: low taxes.
Once you receive the notice, you’ll want to look for some key things. First, look for a homestead exemption. If eligible, this exemption slows the growth of your tax bill over time. Next, you’ll want to see how much tax your paying (this is the wakeup call), and and how they’re assessing your house, garage, shed, dock, driveway, trees in the front yard, etc. Okay, not all of this is taxable, but close. For some of this information, you’ll need to check your local tax website. Once you’ve read over your assessment notice and visited the website, you know more than 90% of Americans (making this number up, but honestly, it could be even worse than 90%).
In most states, you can appeal property taxes on the basis of things like:
- Value – the dollar amount the county deems to be your “assessed value”.
- Uniformity – your tax assessment in comparison to others like it (similar homes, lots, garages, architecture, etc.)
- Taxability – the argument that the home is not eligible for the amount of taxes that have been levied.
There are a few others, and it varies from state to state, but these 3 are the most common. Odds are, most of the appeals will actually involve value or uniformity. In my experience, I’ve always used the argument of uniformity to win appeals.
Gathering the data and forming an argument
Now that you understand some basic tax terms to go with your overview of the assessment notice, you should be able to start gathering evidence and forming an argument that you can use against the tax assessor. In all the cases I’ve won, which are plentiful, I’ve used the uniformity argument.
I start by looking at the home values in close vicinity to the subject property (normally, my personal residence). I try to stay within .5 miles, but depending on your neighborhood, you could use homes 10 miles away. If you live in a dense neighborhood, you should start with your neighbors and work outward. You’re looking for assessment differences that could help you argue that the values are not uniform. For instance, your neighbor and you both have 2,000 square feet. His house is valued at $250,000 while yours is $275,000. That’s $125/ft for him and $137.5/ft for you. You’re paying an extra $12.50 per foot, and you now have evidence of it.
You’re not done, yet. You’ll want to find as many of these examples as you can. I normally shoot for 3-5. The goal is to build an overwhelming argument that your assessment is bogus.
You should continue to gathering data that compares assessed values of the land, pools, outbuildings, sheds, etc. All of this can be used in the same appeal. Don’t stop gathering data just because you found some differences in house values.
Once you’ve gathered all your data, you can start creating graphs and charts that present your case in an easy-to-read format, and submit your official appeal. Now the fun begins!
The appeal process
The appeal process is typically dictated by each state. There is a form that you’ll complete that will include information like your name, parcel ID number, account number, etc. This form, and any clarifying evidence, is what you will present to the county to initiate your appeal. Just make sure you get this paperwork in by the date required on the assessment notice.
In my state, the appeal process starts at the assessor’s office, or “Chief Assessor” as it’s often referred. The assessor’s office will review the appeal and make a ruling. This ruling could be for or against you, or could meet you in the middle. Ideally, a win at this level would be the easiest.
You can continue your appeal to the board of equalization (BOE), assuming you’re unhappy with the results. This is an independently appointed board that is specifically charged with hearing property tax appeals. At this stage, you’ll have the opportunity to present your case against the municipality levying the assessment. If you’ve ever had dreams of becoming a lawyer, this is your chance to play one in real life. But take this seriously, as your evidence and ability to present it will certainly impact your outcome. As with the first stage of the appeal process, the BOE can either rule for or against you, or meet somewhere in the middle.
PRO TIP: if asked whether you would like to present your case or allow the government to go first, you should always let the government go first. This gives you an opportunity to hear their argument and potentially adjust your approach.
If still unsatisfied after the BOE, you can continue your appeal to the Superior Court. If you liked playing lawyer at the BOE, you’ll certainly enjoy the Superior Court! Dust off that suit and prepare your arguments!
Sometimes, you’re denied repeatedly. I don’t know what this feels like, as I am undefeated against my county, but I’m sure it is not enjoyable. If you truly feel that you are being taxed unfairly and have evidence to support your claims, you can technically continue your appeal to the State Supreme Court, and I’m sure you could even continue to the United States Supreme Court as well. If you go that far to lower your property tax bill, you’ve officially earned my respect.
At some point, once all your appeals are either victorious or absolutely demoralizing, you’ll have a final assessed value for the year. This is what determines the amount of property tax you actually pay to the municipality or municipalities. This isn’t the end, though. You can appeal your property taxes EVERY SINGLE YEAR! Now, keep in mind that some states lock your property value for a specific amount of time after an appeal win, so you wouldn’t be able to appeal this locked value. Otherwise, fill out the required paperwork and suit up like Harvey Spector!
I’ve actually written about this topic before, and my previous article included some information that could also assist you in your endeavors. You don’t want to miss it!
DISCLAIMER: Each state has their own property tax rules. In order to be successful, you’ll need to study these rules and ensure you have a legitimate basis for your appeal. This isn’t hard, but it can be time consuming. Look at this as an investment in your financial self.