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Challenge Your Property Taxes and Win!

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county-taxes.pngLast summer I successfully challenged my property tax assessment and won! The process was very simple, and is something everyone should look into doing if they own property. The result can possibly save you hundreds of dollars!

This was my situation: My wife and I finished our basement last year. When we hired the contractors to do the electrical and plumbing work, we filed for a permit with the county to keep everything legal. After the work passed inspection we received a copy of our new property tax assessment with the full cost of the basement remodeling added to our home’s assessed value. That was to be expected, but I was shocked to see how high the county assessed our home. The county valued our house at more than $30,000 above the cost of the home improvement and the amount the house was purchased for the year before!

We looked into the matter further and our house was listed as having more square footage and 1 more bedroom than it has. Based on the assessed value, what we thought our house was worth, and how much our neighbors houses were assessed for, we decided to challenge our taxes. In the end, we won our challenge, and saved almost $60 per month, or about $700 per year! You can read more about our tax challenge here.

How to appeal your property taxes

Know your home’s market value. The housing market in the US has changed drastically the last few years. After record growth in many markets throughout the US, many of those same markets have softened or even diminished in value. This can be especially problematic if your area only reassesses property values every two or three years and you got hit at the top of the bubble. If you are considering an appeal, you should know what your house is worth in relation to your tax assessment.

Verify your home’s information on record. Our house was listed as having an additional bedroom and being several hundred square feet larger than it actually is. You will want to ensure all the information the county has for your house is accurate. Most counties have a website where this information is readily available. If the information is inaccurate, you could have a case for reassessment.

Research neighboring properties. You need to know whether your house is appraised fairly or not. Most counties have web sites that provide property information including purchase price, property taxes, number of bedrooms, square footage, home improvements, total land, and other information concerning the property. Use this information concerning your house and your neighbors’ houses as the first step toward deciding if you have a case or not.

Save Our Home laws. Some states have laws that limit the amount that property taxes can be raised for someone who already owns their house, and the taxes are not brought up to market value until the house is sold. These laws are designed to keep people from being priced out of their home because they cannot afford the continual increases in property taxes.

For example, your neighbors bought their house 20 years ago for $100,000. The house is now worth $250,000, but their property tax increases were limited to a 3% increase per year. In effect, they are paying taxes at a lower level than a $250,000 house. If you buy a comparable house next to theirs, the tax value of the house you buy will be “reset” to the current market value, and you will be assessed for the full $250,000 at the time you buy it. But once you are in, your property tax increases will also be capped at 3%. It is tough to compare tax rates in these states because you can have 2 houses with the same market value with property tax rates of $2,000 and $5,000.

To challenge or not to challenge? If there is a difference between the market value and the assessment value of your home, you need to decide whether or not you want to challenge your taxes. If the difference is only a few thousand dollars, it may not be worth the hassle. However, if the difference is large, it is almost always worth the effort of challenging your taxes. You should be able to determine how much the difference in your tax bill would be by contacting the county auditor’s office.

Keep in mind that sometimes your house may be assessed at less than market value. There may be reasons for this – you may live in a county that does this purposely to give all tax payers a break, or your taxes may not have been adjusted recently. If it is the latter, be prepared for a tax hike the next time taxes are reassessed!

Challenge your taxes. If you decide to proceed, contact your county auditor’s office for instructions. Some counties will do a reassessment based on a telephone or e-mail request, but others require a formal appeal. This usually involves filling out a special form, and sometimes appealing before a board. These actions should increase you chances of a successful property tax challenge:

  • Research and gather information. Determine the market value for your house and the tax assessment value. You should also gather information on your neighbors’ houses to determine if you are paying a similar level.
  • Be organized. Now that you have your data, organize it. Many counties limit you to one challenge per tax cycle (unless there are major changes to your property), so take the time to do this correctly.
  • Present your case. Highlight any errors in the country records, discrepancies between the market value and assessed value, or the value of your house and your neighbors’ houses.
  • Be nice. You are appealing your taxes to people who have the power to grant your request for lower taxes, or stick you with higher taxes for the duration of the assessment cycle, which may last a few more years. Remember, the county auditors and tax assessors are probably dealing with many people in a similar situation to yours. Being nice will not only leave a favorable impression with them, it is the right thing to do.

These steps will not guarantee you success when challenging your property tax assessment, but following them will increase your chances of getting your request approved. Good luck, and I hope you win your challenge!

photo credit: ctoocheck.


Published or updated February 2, 2009.
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{ 14 comments… read them below or add one }

1 Mrs. Micah

All good stuff. The building I work for actually has an item in the budget to have lawyers go over our property tax assessment and challenge it if it’s over what the company thinks it is. And this year, they won back thousands.

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2 Ryan

Good point, Mrs. Micah. Using a lawyer is also an option for a personal situation, but you have to be careful that you don’t spend more for the lawyer than the amount you save on taxes! ;)

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3 Art Dinkin

Are you at all concerned that you just successfully won the arguement that your home is not worth nearly as much as the government thinks? Could this come back to haunt you if you sell you house?

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4 Ryan

Art, great question! No, I am not concerned that I convinced the government that my house is worth less than the government thinks.

My house was incorrectly listed as having one more bedroom and several hundred more square feet than it actually has. The appraisal was over $30,000 more than it should have been. When it was reappraised it was actually brought equal to fair market value.

This saved us about $700 per year for two years when it will be reassessed again. We will not sell the house between now and then so in my opinion, that is money I should not have to pay, and it is money I can have working for me now in some other investment.

I do get the point of your question, and I think it is an excellent point!

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5 Art Dinkin

I see your point too Ryan and think you made the right choice.

I asked these questions because I think we sometimes tend to get too short-sighted. All we want is lower property taxes now… until we try to sell our house and then think our house is worth a lot more than the realtor’s opinion.

I have never had a huge increase in my property taxes. In fact I celebrated the tax bill when the assessment was finally more than I had paid for the house! I think it took 3 or 4 years before that happened. :)

Great blog Ryan. You have a new reader.

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6 Pinyo @ Moolanomy

Ryan, that’s good information. I am glad you are able to get your property taxes reduced

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7 Imani

Another great post.

This is something (challenging my property tax assessment) on my list of to do’s this spring. The flag for me was when I called my home insurer a couple of weeks ago to discuss coverage and they showed my home as a two-family, which it is surely not. So maybe something is not right.

Anyway, I did get a reduction of almost $400 on my insurance. So that is good. More money for ING :-).

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8 Jody

My mortgage payment recently increased by over $400 per month after two years in our new home. Talk about getting priced out of your house. Though my wife and I had rather not, we can currently afford this increase, but what a bunch of crap. We were told by Countrywide that our property taxes had been incorrectly calculated which ultimately resulted in a negative balance in escrow. In this board’s opinion is this amount considered a little outrageous or are we just supposed to take such a huge increase each month in stride? Help.

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9 Ryan

Jody: I had my mortgage payment increase once as well for the same reason – the estimated property taxes weren’t enough to cover the bill and the escrow account needed replenished. Rather than charge you the difference all at once, the escrow company probably added the amount needed to bring your escrow account current to your monthly mortgage payment. They also had to add more to your mortgage bill to bring up the monthly difference between the amount you were paying and the amount you will owe for next year’s property taxes.

That means this year your payments are a lot higher than what you were expecting, but they may actually drop next year because you aren’t adding money to make up for the low amount in your escrow account.

You can read more about it here: http://cashmoneylife.com/mortgage-payments-adjust-change/

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10 Ngoc Chim

Hi Ryan,
I am inspired by your article. I live in Santa Clara County in California and my home was assessed to high. I did submit a proposition 8 review to try to reduce the assessed value of my home. Sadly it was denied. My mistake was not submitting an appeal. I was really upset when I realized that my next door neightbor was paying $1,500 less in property tax. Their house had much more square footage, they purchased the property after mine. Due to tax laws, nothing can be done at this time. I will have to wait for next July to resubmit my proposition 8 review and the appeal. I do agree that all property owners should verify the assessed value of their homes every year. Thanks for all the great tips.

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11 Eric Garrison

Hi Ryan,

The same thing happened to us. We got a higher payment this year.

Can you challenge the county every year? If so, what are the best steps to address it?

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12 Ryan

Eric, each county has different rules regarding how often you can challenge, and the process for challenging. You will need to contact your county auditor’s office for more information. Best of luck!

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13 Stephanie Cartigiano

Barnegat has five Adult Communities – and, I believe, we are being over-taxed…Six months ago when people started appealing we did not because we were comfortable with our taxes – then they were raised in May almost $400 – now they went up $600 a quarter (we are seniors and do not get raises ) and are very concerned about the new Health Care law and how it will affect Medicare and future coverage and services and then the raise in our real estate taxes. How should I proceed because we cannot afford this tax hike.

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14 Ryan

Stephanie, You will need to contact your county about how to undertake the appeals process. Be sure to get information to support your claim, including recent sale prices for homes in your neighborhood. You may be able to appeal simply by filling out a form and submitting it to the county auditor or you may need to undergo a formal appeals process. Best of luck.

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