The housing market has been in shambles for years now. Many homeowners have the seen the appraisal value of their homes slashed by more than 50%. If that doesn't hurt enough, then you receive a surprise in your mailbox- your property tax bill. With everything that has dropped in value, you almost expect your bill to be less. Then you see it. Your property tax bill went up! Say what? How can it be? If this has happened to you- it's happened to many- don't fret. Here are three things you can do to fix your property tax bill.
1. Look for Errors on Property Tax Bill
We all know our property tax is based on the assessed value of our home. Usually, it's about 1.1 percent of that value of the home, but that varies greatly with each state and even more with each county. In our county, we pay approximately 1.7% on property tax. It might sound high to some, but our county is actually less expensive than the a few of the neighboring ones.
You will want to double check they have the dimensions of your home correct (square footage) and the right parcel number. In some cases, home owner's with a 2 1/2 baths could be listed as 3 bath; and yes, 1/2 bath can make all the difference.
When you receive your tax bill you have to understand that 60% of homes are over assessed. If you feel that your property tax bill is too high or it increased for no reason call the local assessor office. Find out how they levy the taxes. In some places, the assessed value is the full market value. Other places, the assessed value is a percentage of the market value, such as 50% or 75%, which is called the assessment ratio. It all depends on your location.
If it's just an error, then it should be a simple fix that filling out a form will remedy.
2. Check the Neighbors Tax Bill
When you call the assessor's office and request your property card get some examples of your neighbor's as well. You will want to pull about 5-10 of your neighbor's and make sure their assessment is not significantly below yours. I'm lucky to live in a area where we know almost all our neighbors and asking them what their property tax bill is no big deal.
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Typically, anything that is 10% below your assessed value will give you some ammunition for the tax assessor office. With my county, this was not needed on the first dispute but would be good information to have in the event your appeal is denied.
3. Make Your Case
Once you receive your tax bill, you have 30-60 days to appeal. It all starts with an administrative review that will have you give all your supportive evidence why your tax bill will be lowered. If it's a mechanical error, they will most likely fix it on the spot. If they don't grant you initial relief, it will continue on to an independent board. Contacting my local tax assessor's office, I was informed that after filling out the proper form to dispute my property tax bill that it would be then be turned over to a board for review. Typically, then I should expect a response in about 30 days. If I then disagreed with the response, I could file for a hearing where I could verbally discuss my points. Once you reach this step, you can anticipate filing fees.
The last step is a judicial hearing. This step will incur even greater fees since you'll probably need the services of a lawyer and an expert appraiser as a witness. I've heard of people taking it to this level, but it's mainly to prove a point. Meaning that after all said and done, any money they would have got back was eaten up by court costs. That's not including the time involved.
What Kind of Property
There are some property types that are exemptions to the rule. Here's what was taken from my county's website:
- Identify and place a value on approximately 46,000 parcels
- Owner Occupied exemption-must have ownership in and occupy the property during the assessment year
- Homestead Exemption-must be 65 years of age during the assessment year, and have ownership in and occupy the property.
- Senior Citizen Assessment Freeze – you must be 65 years of age during the assessment year and you must have ownership in and occupy the property as of January 1 of the prior assessment year and the entire household income cannot exceed $50,000.
- Homestead Improvement Exemption-To qualify, the property must be owner-occupied and used exclusively for residential purposes. Any proposed increase in the assessed value must be attributable solely to an added improvement to an existing structure. This exemption is limited to $75,000 fair cash value.
- Model Home Exemption-To qualify the home must be used solely as a model home for prospective buyers, and not occupied as a dwelling. Application must be filed by December 31, of each assessment year.
- Veterans & Fraternal Organization Freeze – To qualify applicant must be chartered under Federal Law and own and use the real property on which is located the principal building for the chapter.
- Register all Mobile Homes in the County
If you were lucky enough to win your appeal, congratulations! The good news is that you save a good chunk off your property tax bill. The bad news is that you may have to go through the process again. At least the next time you'll be prepared and know what steps you need to take to appeal.
photo by tmac0381