Before we dive in to the process, let's define some common terms related to property tax disputes:
- Property Assessor: A local official that estimates the market value of a property. Also referred to as an Appraiser.
- Property Assessment: The market value of a property or the price a property would sell for under normal conditions, determined by the Property Assessor.
- Tax Bill: The bill sent each year to property owners' mailing addresses which states the amount owed to the municipality for property taxes.
- Tax Levy: The amount to be raised from residents' property taxes after a municipality creates a budget and subtracts any expected revenue from sources other than property tax.
- Tax Rate: The rate used to calculate your property tax bill. Multiply the assessed value of your property by the rate designated by your jurisdiction. The jurisdiction determines that rate by dividing the tax levy by the total assessed value of all properties in the municipality.
The first step in disputing your property taxes is to call your county tax assessor's office and find out their exact process, as it varies from county to county. Most often the dispute process is included with your tax bill or can be found on the assessor's website. However, if not, you can certainly contact the assessor's office to request dispute forms and learn the timeline for the process. Most counties will allow up to 60 days to dispute your property taxes.
The tax assessor will consider inaccuracies with any or all of the following criteria:
Property Value. If you suspect that the property value on your tax bill is too high, you can ask to have your property value re-assessed by a recognized appraiser. Keep in mind, though, that in some states the property taxes are based on the original purchase price of the home, whereas other states base the tax rate on the property's assessed value. Also, if you have made significant improvements to your home, you may not want a re-assessment because your property value might actually be even higher than what is listed on your tax bill.
If you choose to go through with the assessment, the price of a property appraisal will vary depending on the area and value of a home. You can generally expect to pay around $250-$300 and up. If the assessor does conclude that the property value listed on the tax bill is higher than the appraised value, you can bring the assessor's findings to the hearing for your tax dispute.
Comparable Homes. You might also want to look up the rates for similar homes in your neighborhood to determine whether you are being taxed comparably. It is best to find tax records for homes that are the most similar to your own in terms of age, square footage, upgrades, location, etc. Here's an embellished example. Let's say a house on your street is similar in size and age to your home, but their house also has a pool and yours does not. If their tax bill is significantly less than yours, you might have grounds for dispute.
Square Footage Calculations. The last point of dispute might be inaccuracies in the tax assessor's records for your home's square footage. The dispute might be obvious if, for example, the square footage quoted on your tax bill is not what matches your actual records. In many cases these discrepancies are a result of human error or a misquote by the developer. This can be easily disputed with a copy of your home inspection paperwork or original appraisal.
You can submit your dispute forms by mail to the tax assessor's office, including all records and data to support your complaint. However, you also have the right to attend a hearing in person, and your attendance might give you a better shot of succeeding. Typically the dispute hearings are quick and painless and the right paperwork will get you in and out, but vacation homeowners might have to do a little extra planning if they don't live near their second homes. In the end, it might be worth making another trip to your property to attend the dispute hearings if it's going to potentially reduce your property taxes.
Remember, filing an appeal doesn't excuse you from paying your property tax bill at the time it is due. In some counties, you will lose your right to an appeal if your taxes aren't paid on time. So go ahead and pay the amount shown, and if you end up winning your dispute, amended taxes will typically be adjusted on your next bill.
For more information, see Protesting Property Taxes: Tips For Getting It Done Right on ThinkGlink.com.
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