real estate

Property taxes too high? Get help

Home prices are falling everywhere, but homeowners hoping for lower property taxes may find themselves disappointed when the bill arrives.

If you think your home's assessed value is too high, you can appeal the tax assessor's verdict -- either on your own or with the help of a third party who will handle the grievance process for you.

These third parties are generally attorneys or independent companies with appraisers on staff. They'll file the appeal on your behalf, usually on a contingency basis.

"Most homeowners simply don't have the time to appeal, or they become intimidated by all the paperwork involved," says tax consultant Terri Mozer of Tax Reduction Services, a tax grievance company in Greenport, N.Y.

Third parties who help in the appeal process typically charge a percentage of any resulting tax savings for the first year. If the appeal is successful, the homeowner can save hundreds of dollars in taxes.

Should you hire a third party to help appeal your property taxes? Or, will you save more with a do-it-yourself approach?

Third-party help

Third-party representation can benefit homeowners in several ways.

For starters, third-party firms can help owners determine whether they're truly being overtaxed. Third-party expertise is especially valuable in districts that use an "equalization rate" -- which is a percentage of a home's market price -- to determine the tax owed. 

For example, imagine a home with a market value of $250,000 in a tax district that uses an equalization rate of 50 percent. Under these rules, the home should be taxed at an assessment value of $125,000.

But let's say the government overvalues the home at $400,000. Given the equalization rate of 50 percent, the home will be taxed at an assessed value of $200,000. The homeowner who doesn't understand the equalization rate may not realize he's being overtaxed because the $200,000 value is still $50,000 below the home's actual market value.

In this scenario, it's probably in the homeowner's interest to file a protest -- but the unwitting owner might not realize this. Third-party organizations exist to make sure such mistakes don't end up costing homeowners money, proponents say.

Third-party representatives also can expertly navigate the sometimes confusing maze of steps to an appeal.

To file an appeal, you must complete legal forms and gather evidence to present to the local tax assessor, all with the goal of proving that a home has a lower value than was recorded. A decision from the tax authority can take several weeks.

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Some homeowners who decide to appeal on their own may find this process daunting, says Daniel Lynch, an attorney with Amari & Locallo, a Chicago-based real estate tax assessment law firm.

"If you miss your opportunity to file an appeal, you can't go back in time and try to get it corrected," he says. "Our greatest benefit to clients and property tax owners is to stay on top of filing deadlines."

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