Appealing Property Taxes: Why Investors Should Delegate This Task Out

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All of us are busy and could probably list a handful of items that we should delegate in our real estate businesses.

If you haven’t appealed your property taxes before, you need to do it (at least once so you know and understand the process), and if you’re still appealing your taxes, you should consider delegating this task.

In appealing taxes, there tends to be 3 main steps: filing the appeal with the tax assessor’s office, collecting comps, and meeting with an appraiser.

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The Property Tax Appeal Process

Filing the Appeal

In my area, I can email one of the appraisers at the tax assessor’s office with some brief information about my appeal and if the property is within his district, he will file the appeal. If the property isn’t in his district, he’ll help me get in contact with the appraiser I need to talk to. So with one or two emails, my appeal is filed.

In other areas, a paper version of the appeal needs to be mailed or faxed in. Typically it’s just basic property information as well as a brief space as to why you think the property is overvalued.

Once the appeal has been filed, you should receive a time and date where you can meet face-to-face with the appraiser.

Collecting Comps

If you have access to the MLS, this makes it pretty easy to collect comparable sales to justify the value that you think your property should be at. If you don’t, you can use real estate websites like Zillow and Trulia (not as thorough as the MLS) or your local county’s online search (more time-consuming).

Meeting With the Appraiser

This is normally a quick meeting that involves simply handing over the comps that you’ve collected and answering a few questions about the property, specifically its condition. I don’t recommend lying, but it seems to work best if you can emphasize the weak points of the property, such as how long the property sat on the market before you bought it due to deferred maintenance or how the neighbors next door haven’t taken care of their home.

Related: How to Reduce Your Property Tax Assessment

The appraiser will then take your comps and verbal evidence into consideration and mail you a letter a few weeks later with an updated value of the home.

I’ve found that just by showing up and being prepared, the appraiser will lower the property’s value the majority of the time.

Delegating

I still handle the filing of the appeal, but delegate the collecting of the comps, as well as meeting with the appraiser to the real estate agent I work with. He’s had many years of experience in appealing property taxes. Also, his office is a short walk to the tax assessor’s office so in less than an hour, he can collect comps and meet with the appraiser.

I try to arrange as many property appeals as I can at one time so that he can appeal a bunch of a properties in one trip.

Our agreement is that we will split the tax savings for the first year 50:50. So if he’s able to convince the appraiser to lower one property’s tax by $400, I would pay the real estate agent $200 and have a cash flow gain of $200 for that year as well as a tax savings for future years. So any decrease in property tax is a large cash flow gain for the investor.

Related: Increase Cash Flow by Appealing Your Property Taxes

When I was working full time, I would have had difficulty leaving work to appeal property taxes. I no longer work full time, but it still doesn’t seem worth it for me to do this task, as my real estate agent can do a much better job than I can, and I have more time to find more properties to buy as well as to find money to fund those purchases.

If you don’t have anybody in mind to help you appeal taxes, start calling local real estate agents and independent real estate appraisers and see if you can find somebody who has experience and who would be willing to work with you.  You can also try CPAs and attorneys who will handle these services as well.

I didn’t go into a lot of detail of the actual how-to process of appealing property taxes so be sure to check out other great articles on BP like this one from Kevin Perk.

Do you delegate your property tax appeals?

Don’t forget to leave a comment below! 

About Author

Aaron Kinney

Aaron Kinney has been investing in mobile home and land properties with his dad since 2011. He's been a full-time investor since mid-2014 and when he's not working on the business, he can be found reading, playing tennis, or going on adventures with his wife. He has some books and a blog that discuss various aspects of mobile home investing at his website and helps investors speed up the creation of paperwork here.

7 Comments

  1. David Krulac

    Here in PA, its not nearly as easy. There are no email appeals. You have to file in writing and either hand deliver or snail mail. Also some counties charge a fee in order to file. I questioned several department heads on this practice and their answer was that the fee discourages “frivolous appeals.” I said if that is the purpose of the fee, then if the appellant wins their appeal, the fee should be refunded. crickets

    Also real estate agents and almost everybody else is prohibited by law with representing an appellate in the assessment appeal process. According to state law here, anybody other than an attorney, can not represent you as that is “practicing law without a license.”

    So lets review:
    1. no email appeals.
    2. there is a fee to file the appeal.
    3. only an attorney can represent you in appeal process.

      • Aaron Kinney

        Hey David,

        Wow, that’s quite a bit stricter than my area. That’s humorous that only an attorney can represent you in property tax appeals when most attorneys would have little knowledge of determining the market value of a property without the help of a real estate appraiser or agent.

        Would you be able to use a limited power of attorney to give a real estate agent / appraiser the privilege to appeal your property taxes? Just throwing out ideas…

        Deanna, yes you can represent yourself.

  2. Deanna Opgenort

    in CA we have Prop 13, which basis the tax appraisal on the FAIR MARKET VALUE of that property at time of purchase. There is NO other factor that can be considered, unless the house is later extensively remodeled or modified.
    The house I purchase was in (very) bad shape, and a foreclosure. I closed escrow 8/2010
    Purchase price ; $60k
    Tax assessor staff valuation $170k
    Highest price house had sold for at the top of the bubble $140k.

    Anyhow, I discovered to my surprise that the State of California has wonderfully transparent, READABLE and ACCESSIBLE information online! I read through the Tax Assessor’s Handbook (twice!), the instructions to Tax Appeal board members, and instructions to County Tax Assessers on how to asses the Valuation of a mobile home (informative! I found I had a rather deluxe model LOL).
    I talked with the person who had done the initial valuation (her statement that the too-high assessment was OK because “everyone knows prices will go up” was the big red flag). I then talked to her boss 3-4 times on the phone (politely). He was willing to negotiate a lower assessment after discussing the Case-Shiller index, and why the comps were irrelevant (1 was a 1920’s Victorian, another included 2 barns and an RV hanger in the price). the price he suggested was still +2x purchase, so I jokingly offered that if he could find me a buyer at that price I’d sell & split the profit with the County).
    I filed an appeal of the Assessment (everything in order, on time, i’s dotted, t’s crossed), and made sure the Assessor knew I was going to be there in person, even though it meant driving 800 miles each way.

    When it became clear I wasn’t going to budge he backed down. He had a limited budget, & I was willing to take it to the State level if necessary (and his staff HAD mishandled the initial assessment. Badly). He finally backed down shortly before the hearing. “Uninhabitable” due to water damage was the phrase seemed to let him accept the purchase price as market value without admitting fault on the part of his staff (we also put some of the blame on me for putting down that the house was in “fair” shape instead of “poor” when I purchased it. My logic was that for the price I was lucky that the walls were intact).
    .

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