Rising property values can be a double-edged sword. On the one hand, it means that your investment in real estate is appreciating. However, on the other hand, the amount of taxes you owe to the government for that appreciation can be substantial.
Many times, homeowners are prompted to question their property tax assessments. There are criteria that the government rates properties on, and an owner may want to query how the assessor came up with a specific value. Below, eight experts from Forbes Real Estate Council offer their insight into what a property owner should do if they want to query the tax assessment for their real estate holding.
Members of Forbes Real Estate Council make suggestions on what property owners should do when appealing a tax assessment.
Photos courtesy of the individual members.
1. Do Your Due Diligence
Before picking up the phone to hire a tax attorney, you should have researched tax comparables in your local area as tax information is freely available for comparable properties in multiple places. Taxes serve an important role in society; people unfortunately view it as a game. In the end, it’s not the assessed value but the millage rate and that is not a question of value. – Charles Argianas, Argianas & Associates, Inc.
2. Get A Market Analysis
If your home is located in a bad area geographically, you could put up a valid argument that your house value is not reflective of the assessed value. If your home is next to a commercial building, school, graveyard or power lines, the value of your property should be less than the value of the property a few doors down. Get a comparative market analysis and appraisal if needed. – Chris Ryan, Beyond Properties Group (eXp Realty)
3. Take Pictures Of Your Property
Take pictures of the current condition of your property and do comparisons to other properties that have recently sold in your neighborhood. For example, if you have not upgraded your home, then show pictures of the inside of your property. Do a narrative-style comparison for the tax appraisal board backed up with pictures to demonstrate your home is not as upgraded as believed. – Nancy Wallace- Laabs, Profitable Landlord System
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4. Contact Your Realtor Or Broker
Each tax jurisdiction is unique. In my area, assessments are taken as of January 1 every year. If you believe your assessment is high, a broker or realtor can provide comparables, a market analysis or a broker price opinion for you to bring to the county tax assessor when challenging your assessment. Some jurisdictions could even require an appraisal. – Max Coursey, Homie
5. Schedule An Appeal
If you suspect that the tax assessment you received is not correct, schedule an appeal hearing as soon as possible. But be careful! One thing many homeowners don’t consider is that a low tax assessment could have an impact on the market value appraisal of their home. This will pose a problem if you plan on selling the property in the future. – Michael McMullen, Prominence Homes and Communities
6. Contact The Assessor’s Office
First thing that needs to be done once you get your bill from the tax collector is not to call the collectors’ department. Your concern is that your taxes are, in your opinion, too high. Everybody for the most part believes that. The proper thing to do here is contact the Assessor’s Office as they produce the value that the tax bill is based on. Go to the Assessor’s Office website for appeal information. – Michael J. Polk, Polk Properties / Matrix Properties
7. Make Sure You Have Backup Data
As a real estate broker of many years, I have helped many homeowners challenge their tax assessment and we’ve won every time. Here’s the key: I don’t recommend the owner challenge the assessment if they don’t have the backup data. Sometimes I run the comps and tell the owner to go away quietly because based on my comps they are undertaxed! – Eileen Lacerte, Better Homes and Gardens Real Estate Island Lifestyle
8. Compare Data On Local Homes
The best way to tackle this is to compare data on local homes. In the past, this might have required hours of research. Today, you can easily access tax assessments on most real estate portals and use it as a starting point for your petition. – Kevin Markarian, Marker Real Estate