Get Your Property Taxes Reduced
Do you feel like you are paying too much taxes on your home? Are you feeling your tax assessment is higher than it should be? Appealing property taxes is something a lot of homeowners are forced to do.
If you want to learn how to appeal high property taxes, you’ve come to the right place. I will show you how to lower your property taxes by reducing your home’s assessed value.
Taxes are a part of life. While we may disagree, it doesn’t change that the federal and state governments come yearly for their money.
One area where homeowners are hit particularly hard is through property taxes. You will pay a particular tax rate on your property based on where you live and your property’s characteristics. Property owners have many benefits, but paying taxes is not one of them!
But did you know that you might be able to get the amount you pay reduced? Lowering property taxes is on the minds of many homeowners who feel they are paying too much.
If you are like most people, you would like to know how to minimize your property taxes! Who wouldn’t want to understand how to reduce them, especially if they are unfairly taxed?
From thirty-eight years of experience selling real estate, there has been numerous times when homeowners I have met felt they were being unfairly taxed. Frankly, it is not unusual for that to happen. Sometimes it is the squeeky wheel that gets the grease. This can certainly be the case when it comes to property tax abatements.
Let’s take an in-depth look at what a property owner needs to do to start the process of a property tax assessment appeal.
Essential Facts to Know
1. Property tax re-examination is contesting a property’s assessed value to potentially lower the tax bill.
2. Property owners can fight their property taxes if they believe the assessment is inaccurate or unfair.
3. Appeals generally involve gathering evidence such as recent home sales data or comparable property values in the area.
4. Property tax petition deadlines vary by jurisdiction, so it’s essential to know specific timelines.
5. The outcome of property tax appeals can result in a reduction, an increase, or no change in the assessed value and subsequent taxes owed.
What is a Tax Assessment?
Tax assessments are based on your local community mill rate and the assessed value of your home. Local municipalities use these factors to determine your property tax assessment.
Your Tax Assessment Notice Has Arrived in The Mail
The property tax appeal process usually starts when the local government sends its assessment notice in the mail. The tax statement will contain your property’s value in the eyes of the local tax assessor and other additional information about your house.
The tax assessors’ idea of fair market value may ultimately differ from your view of the property’s value. It is essential to understand the actual market value of your property may not be the same as your assessed value.
It is essential to consider how your assessed value compares to similar properties in your neighborhood. Are you being mistreated compared to others who have similar houses?
If you don’t feel that is the case and are confident you can show it, that’s when you may have the chance to get your tax assessment reduced. The steps to the tax abatement process will begin at this point.
How to Lower Property Taxes
You may reduce your property taxes, but first, you must investigate. Appealing property tax doesn’t happen like magic. It will be vital to know how your state and county determine what you pay in property taxes, and you need to know what information the town has about your home.
While you may not alter the tax rate, you can correct the county’s information in your home to get a lower assessed value. The tax rate for your city or town is typically determined and set each year. Once determined, it does not change.
The first thing to do is visit your local assessor’s office. Starting the assessment appeal process will involve knowing how the city or town determines property taxes, which every homeowner should know.
Speak to The Local County Assessor
You can also ask the assessor what it takes to appeal property taxes. The assessment of your home is really what is in question since the tax rate for your city or town is fixed.
It will be crucial to start by getting a hold of the field card that the county has on your property. This property card will list all the relevant facts about your property and the circumstances you may contest.
The property card will list things like the square footage of your home, the size of your lot, the number of bedrooms and bathrooms in the house, and even the size of your garage. Here, you may find an easy way to contest how your town determines your property value.
If the card says you have a four-bedroom home when you only have a three-bedroom house, you can appeal this fact to the town. If your square footage or lot size is off, these are additional valid reasons why you may get taxed improperly.
Appealing property taxes starts with verifying that all the record information is correct. If not, you could quickly slash your home’s tax bill.
A vital factor in property assessments that many owners forget about is special assessments for things like swimming pools, sheds, or other outbuildings. These amenities can have a dramatic impact on a home’s assessed value.
Part of the appeals process will be giving the local assessor supporting documentation validating your argument.
These are some good examples of how you may end up paying taxes too high for your property. Understanding how to appeal high property tax assessments will help you lower your tax bill.
The Importance of Accurate Property Characteristics
Ensuring the accuracy of property characteristics listed on your assessment notice is crucial in the appeal process. Incorrect information can significantly impact the assessed value of your home, leading to higher property taxes. I encourage property owners to file an appeal if there are discrepancies in the property characteristics or if the estimated market value is substantially higher than what the property could sell for in the current market.
This proactive approach can lead to a more equitable assessment and, potentially, a reduction in property taxes. Property owners can initiate this process online by heading to their local town hall. In some locations, you may be able to do it online, making it more accessible and efficient.
Leveraging Online Appeals and Tools
The possibility of online appeals in some areas has streamlined the reconsideration process, offering homeowners a user-friendly platform to contest their assessments. In some places, an online application system will facilitate the filing of appeals and include tools to find and use comparable properties, enhancing the appeal’s effectiveness.
This digital approach simplifies the initial steps of filing an appeal. It allows property owners to focus on gathering the necessary evidence to support their case.
Assessed Home Values Can Be Way Off
Lowering your property taxes starts with understanding your assessed value. There are many different ways to determine the value of a home. Lenders appraise at one value; Realtors evaluate at another, and then the actual market value.
Of course, the local assessor also makes the assessment. The fact is that all of these numbers can vary, and these valuation methods can become very confusing for the average person.
Here is a good explanation of how assessed value differs from market value for those who do not know the difference between these two real estate terms.
Getting your taxes lowered will center around whether or not your home’s assessed value is higher than it should be. You’ll start by fact-checking the records at your city or town hall.
Researching Comparable Properties is a Key
When you move beyond challenging the particular facts on your property card, you can begin looking at your neighborhood and other properties similar to yours to see what the town assesses them at.
This is another place where you may find discrepancies that work in your favor. Remember that the assessor’s office will only be interested in hard evidence. Your neighbor may tell you how much lower his property is assessed, but this is not enough to appeal to the local assessor.
Consider talking to a local real estate agent you trust to see if you can gather evidence on why your home’s assessment is off. The Realtor can look for comparable sales – information that shows what other similar homes were sold for in the area – and can provide you with this information to take to the county assessor’s office.
You Can Hire an Appraiser For Assessment Help
If you would rather not work with a real estate agent to help with the property tax appeal process, you could hire an appraiser instead.
If the market has changed considerably or a mistake has been made, your home could be assessed at a higher value than it should be.
Theoretically, the market value and assessed value should be similar, but they rarely are. When assessed values are calculated, the market data is already old, and assessors use information from the previous year to determine assessed value.
So, if the market increases or decreases in value, the data will not reflect the current market conditions. The current market value might be a lot different. For example, the sale price of your home a couple of years ago may differ from the appraised value.
What is important is that other properties that are similar to yours are evaluated in the same way. For example, if another home is statistically identical to yours and is located in a relatively similar neighborhood, they should be taxed in the same ballpark.
Zillow Has Nothing to Do With Your Tax Assessment
One caution—do not use Zillow to estimate the value of your home! While Zillow has an excellent site for looking at homes, many consumers are unaware that its home values are inaccurate. The “Zestimate of value,” as they call it, can be off by tens of thousands of dollars or more.
I have seen home values on Zillow off by over one hundred thousand dollars! If you are looking for accurate information to make a case about your home’s value, you would not want to use a tool that fails miserably.
Appealing property taxes by using a Zillow Estimate as a source of information would not be a wise move.Click To TweetAssessments and Tax Rates Are Adjusted Based on Fiscal Needs
You should understand that assessments are just a yardstick for a city or town to collect appropriate taxes to run the municipality fiscally yearly. Assessors adjust assessments typically on an annual basis to get a proper amount of taxes from the residents.
The tax rates and taxable value of properties will be adjusted appropriately so the municipality gets what it needs from each taxpayer. The tax roll allows each city to be fiscally responsible.
Most of the time, assessed values are more accurate on recently sold homes. However, when evaluating homes sold years ago, you will often see more variation.
If your neighbor’s home is nearly identical to yours and is assessed much lower for no apparent reason, it could be because, in a prior year, they filed a challenge to the assessment with the town and were granted a reduction.
Their property now has a reduced assessment. You can count on the fact that the city will not decrease every other value of similar homes in the area. This is an excellent example of the squeaky wheel getting the grease. Understanding this information will go a long way in knowing how to appeal a high property tax.
What Makes Property Taxes Go Down
The only thing that makes property taxes go down across the board for all homeowners is when the fiscal needs of the community are reduced.
Taxes fund the community’s ongoing needs, including schools, repairing and building roads, and providing other community amenities.
Property taxes do not go down because home values have dropped. When property values decrease, the local tax rate increases to compensate for the community’s fiscal needs.
Appeal Your Homes Assessment
If you have reliable information demonstrating that your home is incorrectly assessed, gather that information and request a meeting with your local assessor’s office.
It does not need to be a formal meeting unless a representative agrees to meet with you. Typically, you will be provided with an appeal form to fill out. The form will have the information the assessor requires, such as the property classification.
They will want to know whether you are appealing for a residential, commercial, or industrial property. The petition form may be filed with the local county clerk.
You may have to file a formal appeal if the office doesn’t meet with you.
Usually, appeals begin with the presentation of evidence for your case. You can deliver this to the assessor’s office in writing, and the office will tell you how long it will take to review your case.
Most departments can review your property tax reconsideration within a reasonable time frame – often within two weeks to a month after you deliver it. Of course, this will vary depending on where you submit your appeal.
If things go your way, you could get your assessed property value lowered and end up paying less in taxes each year—more than worth the effort for most people. But if you are rejected, the road may become a little more challenging.
If you are denied, you will typically take your case to the state level to see if you get a different outcome.
>Appealing Property Taxes to Appellate Tax Board
Some states, including Massachusetts, allow you to appeal your taxes before an appellate tax board if the local assessor does not change their opinion. Often, this entity is referred to as the Board of Property Tax Appeals.</p&gt;
If you live in Massachusetts, here is the “appellate tax board.” This will give you the exact location of where you need to go for your tax appeal. The state tax commission will be in charge of this.
There is usually a tiny filing fee you will need to pay to have your case heard. Depending on the volume of appeals, your case could take up to a year to be heard. You will be given a hearing date once the assessment appeals board is ready.
A hearing officer is usually assigned to your case.
Know The Tax Appeal Deadline Date
Remember that there are also deadlines to challenge your home’s assessed value. For example, in Massachusetts, owners can still challenge their real estate tax assessments within thirty (30) days of the actual tax bill’s mailing date.
The appeal deadline date is critical because if you miss it, you’ll be out of luck until next year. The tax bill is usually in the third quarter in jurisdictions that assess taxes quarterly.
Massachusetts mails most third-quarter tax bills on January 1st. Therefore, under M.G.L. Chapter 59, most abatement applications must be filed with local assessor’s offices on or before February 1st.
However, this date can vary in jurisdictions where taxes are assessed semi-annually. To preserve your reduction and property tax appeal rights, your taxes must be paid for the current and all prior periods.
It would be wise to check in your particular state to find out any deadlines you may have on filing an appeal to challenge your property assessment!Click To TweetYour Last Resort For Reducing Property Taxes Will Be Court
If you are still denied, the only option is to take the case to court. At this point, it is up to you to determine if the cost of hiring a lawyer and going through further appeal is worth the savings you will get if your case is successful.
These cases are usually heard in the superior or circuit courts. Unfortunately, hiring legal counsel and paying all fees is not worth fighting for a lower property tax bill in court.
Do You Have Property Tax Exemptions?
While being a property owner brings with it the unfortunate task of paying taxes, some folks might get a break. For example, if you are a senior citizen in some places, your tax bill may be lowered. It is also possible that if you are disabled or have served in the military, there may be a tax break.
It will be worth visiting the county assessor’s office to find out. If so, you will likely be asked to complete a form with personal and property information. It will also be wise to know if you can get a homestead exemption, which could end up helping.
Property Tax Appeal Service Near Me
Having been in the real estate industry for the last three decades, numerous people have asked me about property tax appeal services. If you want to protest your taxes and need help, consider hiring a tax abatement professional.
One of the best ways of finding one is to do an online search for a <em>property tax appeal service near me. By doing this search, you should see a few options.
Frequently Asked Property Tax Questions
1. Is appealing property taxes worth it?
That is a personal question that only you can answer. For many people, it depends on how much money they can save. Fighting property taxes can be hard work.
2. How do you successfully appeal property taxes?
Challenging property taxes and winning is about creating a compelling case with fact-based evidence. Opinions will not hold much value for the local assessor.
3. Where can I find comparable sales for my property?
You can ask a local real estate professional to help create comparables for your home. Real Estate agents work with comparable sales data weekly for their clients.
4. Is it too late to fight my property taxes?
Challenging high property tax assessments are determined on a state level. You must check the deadlines for appealing your homes value in your state.
5. Can you appeal your assessment after the deadline?
No. If you miss the deadline, you must wait until the following year to challenge your tax assessment.
6. Do property taxes go up when you make renovations?
Yes. The city or town will know about your improvements if you legally work on your home and get the required building permits. The assessor will visit your home at some point and adjust your assessed value based on completed work.
If you are thinking about skipping building permits to keep your property taxes lower, don’t do it! You will create a challenging situation when you eventually sell your home.</p>
Get Clear on Fighting Your Property Taxes
You may or may not want to go to great lengths to lower your property taxes. Everyone’s motivation level for saving money is different. Regardless of what you want to put in, every homeowner should at least get educated on how their property taxes are calculated.
You can gather this knowledge in the afternoon and check your property card. Who knows? With just a little work, you may save yourself thousands of dollars.
On the slip side, if you are buying a home where the assessed value is significantly higher than the market value, this should be adjusted during the next tax year. If this does not happen, you are now well-armed to challenge the assessed value!
Hopefully, this has given you a clear direction to appeal a property tax assessment. It isn’t easy to win, but it can be done.
About the Author: Bill Gassett, a nationally recognized leader in his field, provided the above real estate information on <strong>appealing high property taxes. Bill has expertise in mortgages, financing, moving, home improvement, and general real estate.
Learn more about Bill Gassett and the publications in which he has been featured. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. For the past 38+ years, Bill has helped people move in and out of Metrowest towns.
Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge Massachusetts.
I recently spoke with a client about this very thing. The good thing is you can keep appealing it over and over again. She eventually got it down but had to put up some money and lots of time to get the proof. It was just land so that made it harder but well worth it not to spend thousands in undue property tax.
Agreed Bob. If you are over assessed for your property and market values are increasing it will probably only get worse over time.
Yes, I could write a primer too for the taxing jurisdiction of my area as I have been doing it for 20 years.
As with all real estate being local (like local weather), the procedures for filing real estate tax protests varies widely. It’s best to contact the local assessor and learn what the procedure(s) might be to file a protest. In many cases it is an art-form (valuable local knowledge) to have the best success.
The bottom line is: what is the most effective form of evidence of a property’s value that an assessor will accept as validation & be most influenced by? (generally it will be a formal appraisal)
Talk with professionals (attorneys, real estate agents, appraisers, mortgage loan originators, real estate investors, accountants,etc) and find out who has been successful in getting reductions in their assessments. Learn from others, so you don’t “reinvent the wheel!”
In many jurisdictions, they may make the process complicated as a way of limiting efforts to protest.
Keep this in mind: Because of the significant change in market values over the past 6-8 years in most areas, assessed values posted by local assessors have lagged. And therefore, you could likely be over-assessed!
Jim this is excellent advice! You are spot on about knowing the local customs when it comes to getting an abatement on your real estate taxes.
Bill,
I’ve read many of your blogs over the years and you usually have good information. But there are some things in this one I think need cleared up.
First, Realtors should never appraise anything unless they have an appraisal license. While you can offer your opinion of what a property would sell for, I would refrain from calling it an Appraisal as this could mislead the public. I have both an appraisal license and a broker license and the qualifications and education required for both are extremely different.
Second, I disagree that “Theoretically the market value and assessed value should be similar to one another.” In a stable market maybe, but they will never be similar in an increasing or decreasing market. In most cities and towns your 2015 assessed value and 2015 tax bill is being determined now. However, this assessed value is based on 2013 sales data. At the end of 2014 the assessor’s office will gather the year end sales data to determine 2016. Assessed values are always chasing current market value. In an increasing market your assessed value is typically less than current market value and in a declining market you assessed value is often higher than current market value. If you try to use a sale from this month to challenge your 2015 tax bill, you will not win. You need to know the time frame your assessor used to determine the 2015 value and pull sales from that time frame.
Lastly, I have a question for you. As someone who has done over 100 appraisals per year for lenders since 2003, I know the banks require us to use FIRREA definition of market value: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
(1) Buyer and seller are typically motivated;
(2) Both parties are well informed or well advised, and acting in what they consider their own best interests;
(3) A reasonable time is allowed for exposure in the open market;
(4) Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and
(5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
You mentioned “Lenders appraise at one value, Realtors appraise at another and then there is the actual market value.” My question is what is the definition of market value Realtors use and how does it differ from FIRREA’s definition and whatever you define “actual market value” as.
John – I am not sure where I say that Realtors do appraisals on properties? Obviously I know that is not the case.
When I mention that theoretically assessed value and market value should be the same I think you are misinterpreting my point. Most laymen would think that what a town values their property at should be as close to market value as possible. I realize this is not going to happen because of the data being old.
We are also on the same page as far as how market value is calculated. My point on that was you could go to a home and provide an appraisal and it could be one figure, I could go and I might come up with something different.
Your appraisal may not match the purchase price correct? While they do most of the time that is not a certainty.
I have also found that assessed value is usually much lower than the market value. Do you find that’s the case in MA?
Actually there is almost no correlation in my area Nutshell Realty. I have seen homes with an assessed value a hundred thousand over and hundred thousand under the actual market value.
Great article Bill. If the steps you list still do not help, I recommend that the owner get an appraisal. I have helped people in the past by providing an appraisal to protest the assessed value of their home.
Thanks Tom. I have also mentioned to clients that getting an appraisal could help them out as well.