Practical money matters by Nathaniel Sillin
SOME homeowners can’t wait to see the assessed value of their home drop. In fact, they’ll tell you the bigger the drop the better. Why? Your property taxes depend on your tax rate and your property’s current market value, which is determined by a local assessor. You can’t dispute the tax rate but you might be able to show why the assessed value is too high.
An appeal that results in a lower value could save you money for years to come, so start the process by determining when you can appeal your home’s value assessment. You might be able to find the deadline on your local assessor’s website, which might also have instructions on how to file an appeal.
Some areas have a several-month window each year for appeals, often following the annual mailing of assessment value notices. In addition, you might be able to dispute your property’s assessment following a renovation or if you just bought the home.
Check your current assessment for errors. Every year, you should receive an official letter stating the assessed value of your home. If you think your property value is lower than the stated value, start collecting proof to demonstrate your reasoning.
One of the first things to look for is a mistake on your property’s description, which might be on the letter you receive or on your property card, which is available at the assessor’s office or online.
It’s not unheard of for a property card to list an extra bathroom or incorrect square footage. Assessors aren’t always able to look inside a home during an inspection and they might not know about renovations to a home.
Make a note of errors and try to estimate the value of each. You’ll be able to use these as a basis for your appeal. To strengthen your appeal, you might also want to find additional evidence.
Comparable properties. Try to make a list of four to six similar properties in your area and their market value. You could use real-estate websites that list recent or estimated sales prices, ask your neighbors or look through public databases to find official assessed values. If you find the homes’ sales prices or assessed values are lower than yours, or similar but your home is in worse condition, you might have a strong argument.
Repair costs. A leaky roof, cracked driveway or other issue could lower your property’s value. Make a list of the faults, estimate the cost for repairs and take pictures as proof.
Neighborhood changes. A property’s value depends on more than just the home itself. If nearby houses have been recently foreclosed or the schools’ rankings have dropped, your property could be worth less than it was before.
Professional assessment. You could hire a state-certified appraiser to estimate your property’s current value. However, the assessment might cost $300 to $500 and this action might only be a good idea if your research already looks fruitful. In some areas, you might need an official assessment to file an appeal.
Once you organize your evidence, it’s time to file an appeal and present your findings. The appeal process varies depending on where you live.
If you have a simple scenario, such as a mistake on your property card, you might be able to make your appeal over the phone. But some counties require you to submit the appeal online or by mail, or you might have to schedule an in-person review at the assessor’s office.
It could take several weeks to months to hear back. If the decision doesn’t come back in your favor, you could file another appeal with an independent review board.
Bottom line: After gathering evidence, you can make a showing for why your home’s assessed value is too high and potentially lower your property taxes. But think twice if you’re considering selling your home soon. A lower assessed value might affect how much someone is willing to pay for the property.
Nathaniel Sillin directs Visa’s Practical Money Skills For Life financial education programs. Follow him on Twitter at twitter.com/PracticalMoney. His articles are intended to provide general information and should not be considered legal, tax or financial advice. Always consult a tax or financial adviser for information on how the law applies to your individual financial circumstances.