Appeal Your Way to Lower Property Taxes

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I wish I’d read this WSJ story three years ago, when I was cluelessly trying to appeal the tax assessment on our old house. The companies that towns hire to do assessments do quick, rudimentary work, which is why homes that are really worth about the same on the open market can be appraised at vastly different values—and therefore the owners can be expected to pay vastly different property taxes.

Now that the housing market has crashed, assessments made two or three years ago can seem like jokes, with homes assessed for $400,000 that are truly worth something like $150K. In my experience, the problem is that the individuals punching in the numbers for valuations—square footage of house and property, number of bathrooms, and so on—don’t have a good sense of the real housing market. Their job is to get the numbers down quickly and move on to the next house. Factors that may mean a lot to potential buyers—like whether a yard is flat and useable or super steep and overgrown—can be overlooked. The square footage is all the valuation worker notes in the report, and a calculator does the rest in coming up with a homeowner’s tax bill.

So it becomes the responsibility of the homeowner to make the case that a house has been overvalued to ease the tax burden. Appealing is a hassle. I had to pay a $100 fee, then take a day off of work and spend hours waiting for my time to come before a board (an extremely bored-looking board who was tired of hearing taxpayers vent their frustrations), present my case with photos I printed out and recent sales of homes similar to ours’, and then argue with a lawyer for the town and representatives from the folks who did the assessments. Several months later, I received the board’s decision, which lowered our home’s assessment slightly—not nearly as much as I’d requested—and brought our taxes down by about $50 a month. Better than nothing. But there was no explanation as to the amount the board settled on, just some numbers on a new assessment printout. Very random. Part of me thinks the board was simply throwing bones to anyone who showed up to appeal. I could have appealed to the state level and gotten an attorney to argue our case, but I didn’t want to incur the expense and just let it go. The bureaucracy wins again.

If you appeal, be prepared for frustrations and a fair share of red tape and nonsense. I hope you have better luck than me. Here are some basic tips on how to appeal your tax assessment, from a WSJ story:

Check on whether you qualify for special property-tax reduction programs such as special exemptions for people age 65 and over. Then, examine property records for inaccuracies, especially square footage. The assessor keeps on file a property record-card that contains your lot number, zoning category, address, sales records, land value and dimensions, as well as significant features as recorded by the town appraiser. Check it closely for errors, including inaccurate descriptions of the property (say, a three-car garage instead of two). Also check whether significant defects like a leaky basement, which could lower the value of the property, are on record. Nowadays, many municipalities put this information online.

While you are at it, check the assessor’s math, particularly with respect to assessment formulas. Some areas use full-market value, replacement value or sales price. Others use a fraction of the market value.

Next, locate three to five comparable properties and check your property against them, making adjustments for differences. Sales data are available from your local government, or a licensed real-estate agent.