How to Appeal Your Property Tax Value

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Last week I wrote about spending money to save money.

One of the ways I mentioned to do that was by challenging your property tax assessment.

In this post, I will go into a bit more detail about that process and show you how to appeal your property tax value.

First, let’s look at a bit of background information. Most jurisdictions in the United States impose some form of a property tax. This tax is based on the value of the property. Thus, these jurisdictions must have a method of valuating each property.

This job usually falls to the local property assessor. The local property assessor is supposed to appraise and then assess the “fair market value” of each property.

RelatedHow to Reduce Your Property Tax Assessment

Property owners have a right to appeal the valuation set by the property appraiser if they feel the value is in error.   This appeal is often done through a citizen panel called the “Board of Equalization.”

This appeal process can usually be done once per year and is a relatively simple but elongated process that just about anyone can handle if you understand how it works. Please understand that the terms and appeal process will vary by jurisdiction. I am just trying to go over some basics in this article.

Here are some steps to follow and tips to follow if you feel your property valuation is in error and want to appeal it to get it reduced.

Examine the Assessor’s Records

The first step is to examine the property assessor’s record card for the property. This card is public record and often can be found online. The record card will list the property’s square footage, number of bedrooms and bathrooms and other pertinent information about the property.

Many times these cards contain errors. They may list more square footage or an extra bathroom, which in the assessor’s eyes increases the value. A simple phone call to the assessor’s office may rectify this problem.

File a Formal Appeal of Your Property Tax Value

If after reviewing the property record card you note that all of the assessor’s information is correct, or the assessor refuses to correct and reevaluate the record card it is time to move on to step two.

Step two is filing a formal appeal. Many times this may not be easy to do. You have to file the proper forms by a certain date and those forms may only be able to be obtained from the assessor’s office. Meaning you will have to take the time to drive to that office, obtain the form, fill them out and then drive back to turn in the form (I said it was an elongated process!).

Justify the Real Property Tax Value

The next step is justifying your opinion of the property’s value. This can begin with the price you paid for the property. If your purchase was recent and an “arms length transaction,” meaning it was between a willing seller and buyer, you have a very good case for the price equaling market value.

However, if you bought a property through a foreclosure or a short sale many times the assessor will not consider those sales as those are distressed sellers who sell for a discount which in their eyes does not reflect true market value.

Either way you should back up your opinion with comparable sales or comps. Select comps that are truly reflective of your property’s value. Make sure they are in the same general location and if possible have the same approximate square footage and number of beds and baths. Don’t just look at lower end comps. The assessor will see right through that as they have access to real estate sales data as well.

Once you review your comps, figure out the average sales price per square foot and apply it to your property. Hopefully you will now have ammunition for your valuation request.

Here is a tip for you regarding comps. Ask the assessor what comps they used to develop their opinion of value. It is public record and they generally have to tell you. That is like having insider information! You can review those comps to determine if they truly do reflect your property’s value.

Take Pictures

The next step is to go out and take a lot of pictures. The old saying really is true; a picture speaks a thousand words. Take pictures of your property inside and out, taking care to show any upgrades pr repairs needed.

Take pictures of your street, of the neighboring properties, of the comparable properties, of anything that may help you. I once took pictures of a major street from my front porch to justify a reduction in value. It worked!

I also like to use pictures from the realtor’s database. Most property listings will have interior pictures associated with them. I use pictures of my comp properties to demonstrate that they might be in much better condition. A kitchen may be completely remodeled for example while mine is not. This all helps justify my reduced opinion of value.

Put it all Together

The final step is to organize all of the information regarding your property and comp sales into a succinct presentation. You want this presentation to be clear and direct. You will likely only be provided with a few minutes to make your case and then the assessor will be allowed to argue against it. So take some time to do it right. Use color copies.

Find out how many board members there are and be sure to have a copy for each one. You only have one shot, so make it worth it.

Be Patient

This process can take up to a year to complete. Be patient and stick to your guns. The assessor may try to negotiate with you. Remember you have done your homework.   You know your market and know your comps. You will likely be successful if you follow the steps outlined above.

While the property assessment appeal process can be time consuming, it can be so worth it by saving you thousands of dollars later on. Plus, it is something that just about anybody can do. I have done my own for years and have been successful every time.

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Have you challenged your property valuations? Were you successful? Let us know with your comments.

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About Author

Kevin Perk is co-founder of Kevron Properties, LLC with his wife Terron and has been involved in real estate investing for 10 years. Kevin invests in and manages rental properties in Memphis, TN and is a past president and vice-president of the local REIA group, the Memphis Investors Group.

2 Comments

  1. Kevin,

    Great article. The only thing I would add is to be ready to quickly and accurately analyze the assessor’s comparable sales and data at a formal hearing. You may not have a chance to conduct a full review of their data prior to the hearing. Important questions to ask the assessor include: “Were these arms-length transactions?” “What logic are you using to support your adjustments?” & ” Can you explain how you selected your comparable sales (or other data)?”.

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