Tax reduction on home by simply writing a letter

17 Replies

We recently wrote a letter to the Tax Auditors office to request a re-assessment of the tax value on one of our properties. This would be the taxable value of the home. For an hour of our time in writing the letter, we recently heard back and they reduced it by $30,000. Previously it had a tax value of $83,500 and they reduced it to $53,500. This is great for us. But not sure how that may effect the home value going forward. I heard that the tax value and home value are separate? We paid $31k for the home, so the tax value is still higher than we paid. Anyway, I was glad to see that we got it reduced. It helps the property to cash flow better too :mrgreen:

Wow - that is pretty amazing Kel - I have never heard of 1 simple letter doing the trick.

Congrats on the idea and doing it. Pretty awesome!

And yes - the tax value and the home value are two different numbers that rarely have anything to do with one another.

This may sound a little academic but tax value and home value (or market value, if you like) are the same, but they may refer to two different points in time. Since in most parts of the country, tax assessment is done when you buy or sell a property, you can argue that since you bought the property for a certain price, the market has spoken and this is its fair market value. After all, no one agreed to pay a higher price for it. However, property assessment is not done at the rate of market fluctuation, therefor the tax assessment value never keep up with the market value.

Hi Scott,

Yeah, I was shocked. Hubby is an attorney so you can imagine how "wordy" that letter was LOL! But it worked and I'm pretty tickled to see the taxes reduced.


Thanks for the insight. Makes sense.

Hey Kel:
Here is an idea. Why won't you post that letter here (Obviously, remove names, address, and other specific reference) so members here can use it in their attempt to reduce taxes of their property. :wink:

Great job, Kel! I've done this several times on my house and always been successful - up to about a 20% reduction typically which can be big money with the amount of property tax we pay in California. And indeed, it has always been as simple as writing a single letter.

Sounds like Kel will be posting a sample letter to help others but the key thing I do to make my case is to find the *cheapest* 3-5 houses that sold near me and then compare their selling price/sqft. to my square footage. Of course factors such as condition of house aren't considered in my letter as I'm just trying to paint a simple, compelling case backed with raw data, leaving any subjectivity up to the assessor. Only once did they ask me to come in to defend my claim and that is the year that I chose to abandon my request as I suspected I would lose the hearing anyway.

And, just to show that assessed value and market value can be unrelated, I was always able to refinance and ultimately sell my last home for well above the tax value that I could always get the county to agree on.

Assessed and Fair Market are rarely related. All one has to do is look up assessed values and compare to sale amounts during the same year. In periods of high appreciation or depreciation, that delta can be quite large. 20% differences, in both directions, are not uncommon.

It always steamed me up when someone would argue that the sales price was higher than assessed value, or that someone else would claim "$$ under assessed value."

Many Assessor web pages will, somewhere in the small print, include the disclaimer that assessed value is used only as a method of distributing the tax burden among property owners, and should not be used as a measure of fair market value.

Any property poorly maintained over time will see an artificially high assessed value, as neighborhood sales of better maintained properties will drive up the assessed value. Alternately, improvements, if not noticeable from the street, will drive the FMV above assessment. While assessors look for improvements and make adjustments, for example, when I added an AC where the compressor was visible from the street, I got the letter explaining why my assessment was going up, they will not generally lower assessments without a request.

Local practices vary. How often does the mill rate change, how often does the assessor revalue, but there are too many factors that the assessor just does not have (like actually getting into the property) to be able to accurately determine any relevant "opinion" of FMV.

Was it in a smaller county? I recently got one lowered by 15% in a small county just with a phone call. I sent in a letter afterwards confirming the conversation and reduction, but they told me that wasn't needed. I'm starting with a call from now on and stepping it up from there.

I did not even know this was possible. I have a property that I am currently trying to sell and the high taxes are killing the cash flow. I surely will try this and see if I have any success. Thanks all for the input.

I did not even know this was possible. I have a property that I am currently trying to sell and the "high taxes are killing the cash flow. I surely will try this and see if I have any success. Thanks all for the input."

You need to be well prepared to present your case. Comps, condition, price paid, etc.

I also wrote e-mail to county auditor office about property tax of condo I am living in (About 3 month ago). I stated how much we paid and how much value different from when previous owner bought the properties with documentations via e-mail. Then, property was re-assessed and reduced by more than 25% from the original assessed value we received. I got all the refund back and I am happy now :)

Ralph, you made a great point and that's why it really bugs me when I see a wholesaler (Yes, I'm talking to you Mr. Wholesaler...) waves in pride the tax assessment value of the house as a proof of equity.
" Buy this house with $35,000 in equity for mere $30,000!! (2007 tax assessment value is $65,000) Blah, Blah, Blah..."

I hope most of us are smarter then that.

I totally appologize about that. My husband had a copy of it on his computer but now thinks he deleted it...DOH! But he has a hard copy. However, looking at it, it's going to take me awhile to retype this thing. It's long. When I get some time to do it I'll post it for you guys.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you