Have you ever received a property tax assessment that you thought was unfair? This is a very common question for property owners. However, the good news is that it is possible to appeal a tax assessment.
Understandably, if you don’t have any tax or legal experience, you may not know what to do or how to begin tax planning for your estate, especially when it comes to property tax appeals.
Here are some steps to help you handle your property tax appeal like a pro.
What is a property tax assessment?
Property taxes are calculated based on the value of your home. This is an especially important consideration for people looking to buy and flip a home, as improvements to the property can cause property tax costs to rise significantly.
Property tax assessments are conducted by property tax assessors (officials employed by local county governments). The appraiser will inspect your property, compare it to similar properties, and consider factors such as whether the property is residential or used for business.
When conducting the appraisal, they may use the cost approach, a method of valuing real estate that takes into account the cost of improvements to the property and the underlying value of the land on which the property sits. Alternatively, your property may be assessed based on its market value or income-generating potential.
Although the factors that determine a property’s assessed value are objective, individual appraisers may interpret this data differently. This means there is a high chance that your property will receive an inaccurate or unfair assessed value.
Steps to a Successful Property Tax Appeal
If you are currently dealing with what you believe is an inaccurate property appraisal, there are some steps you can take to resolve the issue.
A timely and organized appeal can be the difference between success and failure. While these five steps will not guarantee a successful appeal, they will help ensure that you present a logical, coherent case to the authorities.
1. Check the accuracy of the assessment
Before considering an appeal, it is important to understand how a property appraisal is performed. You can request a copy of your property appraisal report from the county assessor’s office.
Your most important task at this stage is to read the report thoroughly and cross-reference all information with publicly available information. For example, you can and should cross-reference the property’s exact square footage, number of bedrooms and bathrooms, average house prices in the area, and more.
Given the potentially technical nature of a property appraisal, it’s a good idea to interview multiple real estate agents. These professionals will have access to resources such as databases, real estate virtual assistants, professional networks, and legal contract analysis, allowing them to better analyze the assessed value of your property.
As Wyoming Trust CEO Mark Pierce says, “While you can review the property appraisal yourself, it may be a good idea to hire a real estate professional or attorney. These professionals not only know what to look for but also have better resources , and they may devote more time to reviewing the assessment than you do.
2. Research comparable properties
One clear sign of a misappraisal is that your property is assessed for a higher value than similar homes in the same area.
Look for properties in the same area that are similar in size, age and condition. Additionally, real estate websites, public records, and local real estate agents can be valuable sources for finding and evaluating comparable properties.
“A lot of people underestimate how much due diligence can help present their case,” said Jonathan Feniak, general counsel at Colorado LLC Lawyers. “Having a real estate attorney look at the data and dig up the facts can make any property tax case better. Appeals make a huge difference.
3. Gather evidence
Once you know enough by looking at the appraisal report and comparing it to other properties in the area, it’s time to gather evidence. Don’t leave anything to chance. It is always wise to build a strong case by gathering as much evidence as possible. The more evidence you have, the better your chances of getting a fair decision.
4. File an appeal as early as possible
In most cases, you can appeal online. However, in some states, you need to do this in person. The most important thing to remember is to make sure you file your appeal accurately and as early as possible.
“Property tax appeals tend to have strict deadlines, so you need to act quickly,” advises Alan Parkes, owner of Roofcorp in Denver and Colorado Springs Roofing. The exact time frame varies by state, so you should check with your local assessor’s office to determine how much time you have.
In either case, be sure to review all instructions carefully and make sure all required information is included.
5. Follow up
After the hearing, it is a good idea to follow up with the Appeals Board to make sure they have received all the information they need. You should also keep a record of all correspondence and decisions related to your appeal as these may be useful in the future.
getting Started
If you are considering filing a property tax appeal, these steps will help you prepare and present your case effectively. As we recommend, it would be a good idea to hire an attorney to help you navigate this process efficiently.
Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.
