Challenge Your Property Tax Assessment

7 Replies

I just finished reading this blog post here on BP:
https://www.biggerpockets.com/renewsblog/2014/04/2...

Point number 3 really caught my eye:
Challenge Your Property Tax Assessment

Here is what it says:
"I do this on just about every property I purchase. I have found that the local property assessor’s values are often tilted towards the high end. After all, their unstated goal is revenue. If you buy properties at a discount like I do, you can use your purchase prices to significantly reduce those assessed values, thus reducing your property tax bill and increasing cashflow. Be forewarned, this is a time consuming, bureaucratic process, but it can be very rewarding, as the new value will likely be in place for several years."

This is an interesting concept. I have not heard this one before. The blog post was great, I am not trying to take that away from it. But I am wondering HOW to even begin this process...

Does anyone have any links to other blog posts about this or feedback?

Originally posted by @Alex Sanfilippo :

I just finished reading this blog post here on BP:
https://www.biggerpockets.com/renewsblog/2014/04/2...

Point number 3 really caught my eye:
Challenge Your Property Tax Assessment

Here is what it says:
"I do this on just about every property I purchase. I have found that the local property assessor’s values are often tilted towards the high end. After all, their unstated goal is revenue. If you buy properties at a discount like I do, you can use your purchase prices to significantly reduce those assessed values, thus reducing your property tax bill and increasing cashflow. Be forewarned, this is a time consuming, bureaucratic process, but it can be very rewarding, as the new value will likely be in place for several years."

This is an interesting concept. I have not heard this one before. The blog post was great, I am not trying to take that away from it. But I am wondering HOW to even begin this process...

Does anyone have any links to other blog posts about this or feedback?

 It is easy to get started.  Contact your local County Assessor's office and tell them you think your value is too high and you would like to challenge it.  Here in California, most counties will offer an informal property tax assessment review but if they do not, or if you disagree with their findings, you have the right to appeal your value.  You may even find information by searching the word "appeal" on the county website.  Be prepared for a property inspection to verify things like condition and to provide supporting documents to show any deficiencies or obsolescence which would contribute to a lower value.  Generally, when assessments are too high, it is because the county appraiser has not visited the property since they have too much volume for that.  

I've used a couple Attorney's that specialize in this type of work in the Chicago area.  The way that it works is that they only get paid if they win an appeal. One Attorney that I used would take 50% of your first year appeal and I've switched to another one that takes 10% of each year the taxes are reduced. We've got reassessments every three years. 

@Chris Carollo 50% is kind of high. I refer all of my client's to a firm that takes 33% of the first years savings and year 2 and 3 are free. This is for residential properties that fall in cook county. For commercial the rate is lower, generally about 25% or so depending on the property. The higher the taxes, the lower percentage they may accept. If you'd like me to put you in touch for a specific appeal, pm me and I'll be glad to do so. Thanks. 

@Chris Carollo @Alex Sanfilippo - It is a waste of money to use an attorney.  It only takes a few minutes to fill out the form to request an informal review and it is completely free.  In my experience working in an assessor's office, those with attorneys did not get lower assessments than those who filed on their own.  The important thing is to bring your property to the assessor's attention so that they do an actual appraisal on it rather than mass modeling.  

Originally posted by @Alex Sanfilippo :

@Carrianne Mucho, are these forms available online somewhere that you know of?

They are in my county, but you will have to check the county you are in.  Call the number on your property tax bill to ask for instructions OR, Google search your County name + "assessor" and you might find it. 

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.