LOWERING TAXES ON YOUR PROPERTY
In every state, property taxes help pay for schools,
police protection, fire fighting and other services.
While we may disagree strongly on how much we
should be taxed for these services, we all agree
that the system should be fair. Owners of similar
properties should pay similar taxes. But collecting
property taxes involves a complex process of
assessment, and mistakes are made all the time.
This article will help you understand how the
system works. Your lawyer will be able to advise
you on what to do if your tax bill seems to be
out of line, and could help you save hundreds
or even thousands of dollars.
The Assessment Process
In most states the assessor or board of assessors,
who are local government officials, place a value
on your property for tax purposes. Generally
they follow a formula for assigning value. The
local government then imposes a certain amount
of tax per dollar of assessed value, which results
in the tax bill you receive in the mail.
The process of arriving at individual property
tax bills is complex. Each property in the municipality
is described on a “property record card.” This
includes a legal description of the land and the
buildings and other improvements on the land, including
square footage, construction materials, depreciation
and other physical attributes. It may include a
recent sale price or the assessor’s estimate
of the value of the improvements based on replacement
cost. Each property is reassessed on a regular
basis, whether every year or every three or four
years.
There’s usually a complicated schedule for
getting from appraised value to the dollar amount
of taxes owed. After crunching all the numbers,
city employees send you a notice of assessed value,
followed before long by the actual tax bill. The
Internet may help you here. If your county assessor
has a web page, you may be able to compare the
assessed value of your neighbors’ homes and
comparable homes in the area. If your assessment
looks reasonable, you pay the bill and that’s
the end of it.
Fighting City Hall
But what if you think the tax levy is out of line?
What if your assessment has jumped dramatically
since last time but your neighbors’ assessments
haven’t?
The time to object is when you receive notice of
assessed value. If you wait to receive the actual
tax bill, it may be too late.
At this stage, procedures are usually informal.
You and your lawyer can gather any evidence you
think will show that your property isn’t
worth as much as the assessor thinks it is, and
then present your argument.
Here’s what you might want to look at:
- Assessment notice. Look for obvious mistakes in
the notice you received, such as an incorrect address
or the wrong number of bedrooms.
- Property record card. If your
county assessor has the information posted
on the Internet, check the
record on your property. Otherwise, go down
to the assessor’s office and ask to see
your property record card or a printout of
the computer
record. Make sure the acreage, square footage
and other details are correct.
- Special tax breaks. Some jurisdictions
give tax breaks to certain categories of property
owners,
such as a 10 percent tax waiver for owner-occupied
homes, for owners 65 and older, or for disabled
veterans. Ask the assessor’s office what
breaks you qualify for and make sure that exemption
is reflected in the assessment notice. Tax breaks
aren’t given automatically; you have
to apply for them.
- Property condition. Is your
home overrun by termites or badly damaged by
fire? The assessor might not
know about it. Take repair estimates or photos
with you to show that your house isn’t
worth what they say it is.
- Comparable homes. Do a bit
of research to learn what similar homes in
your
neighborhood have sold
for recently. If you can’t find it on the
Internet, local real estate brokers should have
sales information, or check with the county registrar
of deeds. You can even ask at the assessor’s
office to see the assessed value of comparable
homes. Be sure you have the address of each house
you talk about, and if possible the permanent index
number (available from the county collector’s
office or the township assessor).
- Appraisal. You may want
to hire an appraiser to provide a second
opinion
on the value of the property.
When choosing an appraiser, look for someone
well qualified, with a reputation for competence,
who
would be credible as a witness.
Tax Appeals
If your negotiations with the assessor don’t
go your way, you may be able to appeal the decision
through an equalization board, assessment review
board or board of appeals. Again, you’d present
your evidence and explain why you believe your
assessment should be lowered.
If that doesn’t work and you really want
to push it further, the next step would be taking
it to a state court or tax tribunal. Consult your
lawyer to find out what your options are and how
to proceed.
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