Many of us feel that property taxes have not mimicked the course of real estate values. According to an April study by the National Association of Home Builders, the most recent available, property taxes across the U.S. have increased by nearly 20% from 2005 to 2009. But wasn’t 2005 when the real estate bubble burst? How could property taxes have gone up from 2005 to 2009? And over the same period, home prices in major urban markets decreased 31%, according to the Standard & Poor’s/Case-Shiller 20-City Composite Index.
The median annual real-estate-tax payment was $1,614 in 2005 and was $1,917 in 2009. Hmmm, what gives? The obvious answer is that local taxing authorities know that government budgets are hurting, as are all of our own budgets, so it would appear they are seeing if they can get away with tax increases when values in most markets are likely not increasing to support the tax increases? Maybe. A better explanation is likely that the property taxes appear out of alignment with the market due to the fact that tax assessments are not done annually, so there is a lag time.
So maybe its time for you to help your tax assessor get up to speed? Below are some ideas and tips on how to go about appealing your tax assessment:
1. Fact-check the tax assessor’s work. About half of all successful appeals come from homeowners pointing out an error in the assessor’s description of their home.
2. Hire an appraiser to find accurate comparable sales of similar homes to help support a lower valuation than the tax assessor came up with. Try this website to find a local appraiser, Appraisers.com.
3. Try and find comps on your own, or through a local Realtor. Bring sale documents and photos of your property, as well as the comps. I would not rely on data from websites like Zillow or other online real estate information sites, since their figures aren’t official and are often times inaccurate.
4. I would not use a property tax consultant. Although there may be some firms that are a legitimate help, enough of them are a scam that it is a concern. In the last three years, the Better Business Bureau has received nearly 650 complaints nationwide about propertytax consultants.
5. You also can hire a tax lawyer to do the legwork for you, if you are willing to pay. But I don’t think there is a need to pay a lawyer, you can do this on your own.
And please make note, most local governments allow somewhere between 10 days to 30 days to appeal tax assessments after notification. To figure out the time frame and any other rules you need to be aware of in your county or city, check your reassessment notice, which is typically sent in the mail, or call your local assessor’s office, or do an internet search and check their website for other important data. I hear up to half of all assessments are too high in the U.S., so most of us should be looking into this!