Appealing your property tax assessment: when, why and how to
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Property tax assessments help determine how much property taxes you’ll pay, based on several valuation factors. Appealing your assessment can sometimes help lower your tax liability, especially if your taxes have gone up considerably. But you must prove your home’s value is less than what the assessor initially estimated.
How property taxes work
Property taxes cover the costs for public needs and services, such as schools, hospitals, general funds, roads and utilities. The tax rates are set by individual locality, often by county, and can vary widely. In Montgomery, Alabama, for example, the 2022 property tax rate was 0.29 percent, while in Suffolk County, New York, the rate was 1.7 percent.
To calculate property taxes, your county or municipality will typically factor either the assessed or fair market value of your home compared to the value of other homes in your jurisdiction, and will set a tax rate based on its budgetary needs. How often this process occurs depends on your state laws and county procedures. For example, the state of Montana requires properties to be assessed every two years, but Oregon requires assessments every year.
While property tax assessments may occur every 1-2 years or so, a property’s market value can shift at any time based on other economic indicators. When the real estate market shifts from a seller’s market to a buyer’s market, for example, your home’s value could fluctuate significantly over the course of several months. In this case, property tax assessments may lead or lag market value. If your assessment is completed at the beginning of a year, the actual market value of the home may rise or decrease before subsequent assessments are performed.
Homeowners in an area with comparable properties — similar construction, square footage and lot size — should have property taxes that are equally similar in value.
Most counties have algorithmic computer systems that support the values determined by the assessor in order to ensure consistency and accuracy for each property, explains Jason Vanslette, partner at Kelley Kronenberg, a Fort Lauderdale, Fla.-based law firm.
“However, as there are hundreds of thousands of properties in a given county, there could be several factors that might be missed when relying solely on the government-controlled equation,” says Vanslette.
How to appeal a property tax assessment
Deadlines to appeal
If you believe your property tax assessment is inaccurate, you can challenge it, but a time limit typically applies.
In DeKalb County, Georgia, for instance, homeowners receive the assessment in May and have until July to appeal it, according to Bill Golden, a real estate agent with Keller Williams in Atlanta.
In other places, you might have a shorter window. In Texas, assessments are generally sent out in April and homeowners have until the middle of May to contest them. In South Florida, homeowners only have 25 days from the date a notice is mailed to file a petition with an appeals board, Vanslette says.
“This is a strict deadline, so be sure to seek assistance as soon as possible if you feel the assessed value differs greatly from your perceived value,” says Vanslette.
Hire a third party or DIY your appeal
While some homeowners decide to conduct the appeal themselves, others may opt to hire a third party who can take on the appeal for them for a nominal fee.
“Services often charge a percentage of the money saved,” Golden says. “Whether that is worth it largely depends on how far off you perceive the assessed value to be.”
If you do it yourself, you might also be charged a small administration fee by your county in exchange for taking up the appeal.
Golden’s rule for appealing assessments is to consider whether the fair market value is less than what you would sell the house for.
“For instance, the county’s value of my house has gone up many times over the years, but so has the actual value, so even though it seems unfair that it has gone up so much, I know my house is worth more than they say it is,” Golden says. “It’s futile to try to prove otherwise.”
Determine fair market value of the property
A real estate agent can help you determine whether the assessment is fair, usually by completing a comparative market analysis, or CMA. This analysis can illuminate whether or not contesting an assessment is worth the time and expense.
Another way to determine if the value deemed by your county is fair is by examining other homes that were built in the same year and have similar square footage and improvements, along with other factors. You can include this information (perhaps with additional documentation, such as photos) with your appeal to help make your case.
When to expect to hear back on your appeal
Depending on the deadline for appeals in your state, as well as the number of appealing homeowners, you will likely hear back on your case within a few weeks. A backlog of appeals may delay the process, but generally the process should not take more than a month or so, as property taxes are expected to be paid within a calendar year.
A local real estate agent or attorney may be able to provide an accurate window of specific resolution timelines for your area.
What does it cost to appeal a property tax assessment?
The cost to appeal a property tax assessment depends on your county’s rules and if you’re paying a third party. In some areas, such Salt Lake County in Utah, filing the appeal itself is free. But you may need to have a full appraisal of your property to support your claims, which can cost between $300 to $800, depending on where you live.
An attorney is not necessary to appeal a property tax assessment, but if you elect to use one, you’ll of course have to pay their legal fees. Attorneys in higher cost of living areas or those with more experience will typically charge higher rates than less-experienced attorneys and those located in less affluent areas.
Be aware that in rare cases, filing an appeal can increase your property tax assessment if the documentation you provide shows your home’s value is more than was originally assessed. So be sure to double-check that your appraisal, comparable sales data, and other documents that support the decreased property value you believe is accurate.
How often can I appeal a property tax assessment?
Depending on where you live, you shouldn’t have to appeal your property tax assessment each year. For example, if there are significant events that take place annually, such as hurricanes, flooding or wildfires, that could devalue a property, there is likely no need to appeal every year.
Some states have limitations on how much an assessed value can rise, as well, so it may not always make sense to appeal. In Florida, the state caps increases in assessed value at 3 percent, for example.
“However, after you purchase a property and obtain a new assessed value, you should carefully consider whether the assessed value comports with the actual market rate, as this will be a baseline value for many years thereafter without much deviation due to the caps,” says Vanslette.