Money & Policy

6 Ways to Lower Your Property Taxes

Contest your home assessment if you think it's too high

(This article appeared previously on MarketWatch.)

This is the time of year when many Americans stop thinking about taxes and start thinking about beaches and vacations. But since many home assessment notices for 2016 are mailed out in the spring, you might be unpleasantly surprised to see that you’re soon going to owe more.

While most households take their assessments at face value (only one in 10 households bother to appeal), if you think your house is overassessed — as a whopping 30 to 60 percent of properties are, according to the National Taxpayers Union (NTU) nonprofit taxpayer watchdog group — fight back. 

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Here’s how to challenge the assessment, boost your odds of success and ultimately put more money in your pocket:
1. Understand the Process
On your assessment notice, you’ll see instructions telling you who to contact if you disagree with the assessment, how to make an appeal and other pertinent details, says real-estate expert Sid Davis, author of six housing books (including The First-Time Homeowner’s Survival Guide, which contains an entire chapter on property taxes). You will also be given a specific time frame in which to make your case.

Take note because while in some areas you may have a full six weeks to appeal (from the time you receive the assessment in the mail), in others, you’ll have as little as two weeks. “If you miss this window, you’ll have to wait until next year to protest,” says Davis.

2. Review Your Property Card
Your property card — which is often included with the assessment notice, but is also typically available online — contains all the information the assessor used in determining your home’s assessed value: square footage, the number of bedrooms and bathrooms and features such as a garage or finished basement. Look this over carefully. Very carefully.

Does this card indicate that you have three bedrooms when you only have two? That you’re sitting on 3.0-acre lot when it’s only .30? Is your house closer to 2,500 square feet than the specified 3,500? Errors like these are more common than you think, according to Pete Sepp, president of the NTU.

The good news is that simple discrepancies can often be corrected right away and you can avoid a formal hearing. “You’d be surprised how much can be settled with your first try; if the adjuster has no reason to disagree with you — for example, if your property card says you have four bedrooms and you clearly only have three — it’s a slam dunk,” says Davis.

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3. Gather Evidence
Your ammunition: comps. Find out what five to 10 comparable homes in your neighborhood have recently sold for (in the last six months) — comparable in terms of age, size and district. “Use a site like Zillow or just have a friendly real estate agent in the area pull these up for you,” says Davis. “Most will do it for free because they want to build goodwill; plus, it only takes them 10 minutes and they can just email this to you or give you a print out.”

Back up your case with any relevant photos. “Preparation for this process can go a long way in helping your case,” says Mitch Roschelle, a partner at PwC, and the firm’s U.S. Real Estate Advisory Practice leader. “Towns are inundated with appeal applications and those that are well-organized and well-supported stand the best chance of being considered.”

4. Submit Your Package
While some areas allow you to email your packages and others require you to call in and make your case in person, most appeals are submitted in written form to the county boards, along with a statement explaining why you feel the evaluation is inaccurate. Claims must be supported with the aforementioned evidence (comps and pictures).

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5. Go It Alone
While there’s no shortage of professionals — from attorneys to real estate agents to consultants and appraisers — available to help you make your case, there are two reasons to go it alone, says Sepp.

First, while legitimate third party experts can save you a lot of time, energy, and frustration, they are also going to pocket a big chunk of your tax savings — a flat percentage of up to 50 percent of your first year’s reduction.

Second, some appeals boards are more sympathetic to homeowners who represent themselves. “There’s the ‘believability’ factor,” says Sepp.

6. Be Professional
As you’re sitting in your designated room, or cubicle, one-on-one with the adjuster assigned to your case, “don’t plead poverty, get angry or belligerent; just present your case as to why your taxes need to be lower and then shut up,” says Davis.

Then, reap the rewards. “Over 30 percent of researched, prepared homeowners have some kind of success appealing,” says Sepp. “And it can make a dramatic difference in your bill, especially if you live in a jurisdiction that will allow that new assessment to stay in place for several years.”

Vera Gibbons is a financial journalist. A former analyst with MSNBC who appeared regularly on The Today Show, Gibbons has written for Inc., SmartMoney, Kiplinger’s, Real Simple and All You, among others. She recently hosted a series on Yahoo! called Savvy Spender and completed a personal-finance insurance series for msn.com.

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