The National Taxpayers Union reports that as much as 60% of taxable property in the United States is overtaxed. In fact, while homeowners around the country are watching the value of their homes plummet, many are actually paying higher taxes. According to the National League of Cities, tax revenues increased 6.2% in 2008 (compared to 2.2% in 2005); while home values have decreased an average of 30% since 2007. Why are home values decreasing but property taxes, which are based on the home’s assessed value, increasing?
In most counties, property taxes account for almost one-third of the entire county budget. While the government seeks to replace lost income from the housing slump, many are raising property taxes despite the decrease in home value – causing more homeowners to appeal their property taxes in an effort to bring them back to a more realistic amount compared to their home’s value.
In many communities, tax assessors have a lot of leeway in deciding a home’s value. For example, in Lake Tahoe, homes are judged and taxed based on how smooth their beachfront property is. In Florida, a tax assessor can factor in a home’s proximity to a nightclub when determining its value.
How You Might Appeal Your Property Taxes
The property tax appeal process varies from one state to another, and even among different communities in the same state. The lack of a clear set of steps for appealing property taxes can make the process seem intimidating, but if you feel your property taxes are too high in comparison to your home’s value – it’s worth the effort to appeal.
First, contact your local tax assessor’s office and find out what paperwork is required to appeal property tax values. There will also probably be a certain window of time during the year during which you can file your appeal; make sure you have all the required documentation by the stated deadlines for your county.
Look for five properties in your area, and find out how much they sold for recently or how much they’re paying in taxes. You want properties that are similar in size to your own home, and the information should show that your home is over-valued based on sale prices and tax payments of similar homes in your area. A real estate agent may be able to assist you with this step by printing a report for you.
You may also consider hiring a professional appraiser to have your home appraised to further provide proof that your home is overvalued and overtaxed. This will cost you around $400, but if you win your appeal and have lower property taxes moving forward, the expense may very well pay for itself in the first year or two of lower property tax payments.
Some people have hired an attorney to assist them with the property tax appeal process, but many experts recommend doing it on your own. Be prepared to follow through with each of your actions with the assessor's office, and know that the entire process can take several months.