Often, people believe that the property tax bill they receive from their local government is set in stone. The property tax bill is tied to a report prepared by the local tax assessor, based on the assessor's estimation of the market value of your property. Property assessing is an inexact science, so you may have grounds to challenge your bill and save hundreds, or even thousands, of dollars in annual taxes. Few homeowners appeal their property tax assessments—no more than four or five per cent. But those who do have a good success rate, about 40% receiving tax reductions.

Tax Assessments Are a Local Process

Property taxes are set at the local level—typically by your county or city. Each locality has its own procedure for establishing the amount of taxes owed by people who own property within its borders. Some localities reassess property values every year, others do so every four or five years. Some assessors value each property individually. Many others value your property based on area surveys. Your locality also sets its own appeal process for property owners to dispute tax assessments.

Check Your Property Record Card

The first thing to do is check the record card for your property (these records are almost all online, so they are no longer on “cards," but this terminology is still used). You can usually check your record card online at your tax assessor’s website. You can find a link to your assessor’s website at Assessor Links USA. If your record card is not available online, you may have to go to your assessor’s office to view it.

The assessor uses the information on your record card to determine your property’s market value. The card contains information such as square footage, condition of the property, and property features. If any of this information is incorrect, the assessor's valuation may be off. For example, if the square footage on the property record card is incorrect, it is possible that the tax assessor has overvalued your property.

If any of the information on the record card is incorrect, contact your assessor’s office to get it corrected. You should be able to do so without having to go through a formal appeal process. A phone call or visit to your assessor’s office may do the trick. Check your assessor’s website for instructions or advice on what you should do.

Challenging Your Property’s Assessed Value

Even if the information on your property’s record card is accurate, your property’s assessed value may be too high. Tax assessors use the sale of comparable properties at the time of the assessment to establish the market value of a property. You are effectively taxed on the amount for which you could sell your property at a certain point in time. If the value of your property decreases after the assessment, you may end up paying taxes on a sales price that you can no longer receive on the open market.

There are several ways you can show that your property’s assessed value is too high:

• First, you can have the property appraised by a qualified professional real estate appraiser. This will cost a few hundred dollars. However, if you already have a recent appraisal, you can use it instead.
• Alternatively, you show that comparable properties recently sold for less than your property’s assessed value. You can get comparable sales information from records at your assessor’s office, realtors, or online at websites such as redfin.com and zillow.com. Ideally, you’ll want records of at least five comparable recent sales that occurred no later than 90 days after your property was assessed. The best sales comparisons are those for property in your area or neighborhood.
• Finally, you can show your assessed value is too high if your property has deteriorated since it was last assessed—for example, due to a fire or flood.

Determine the Benefit of an Appeal

The time and effort that it will likely take to challenge a tax assessment may not be worth the effort. Before you start the appeal process, it's important to determine the likely amount of money you will save per year on your tax bill. Also, lowering your tax assessment may not result in a tax savings because of any tax breaks attached to your property that bring the taxable base below the market value. Tax breaks can include discounts for certain types of property owners, such as the elderly and veterans, or discounts for owning property in certain distressed locations. Most localities re-assess property every three to five years, so it may make more sense to wait rather than to challenge.

Filing An Appeal

If you elect to formally challenge your property assessment, you must file an appeal with your local appeals board. Make sure to do so within the appeal period. How long you have to appeal varies. In most counties and cities, you must file an appeal within 30 to 90 days after you receive your annual property assessment notice or letter. However, you might be allowed to file a late appeal if you have a good excuse—for example, you were ill or away from home when the assessment notice was mailed.

You’ll need to file a written application for your appeal. This, along with instructions, should be at your tax assessor’s website. Typically, you will be required to attend a hearing where you present your evidence. These hearings are usually informal in nature. In some states the assessor is required to present evidence first at the hearing to show that the assessment is justified.

A Tax Lawyer Can Help

The law surrounding challenges to property tax assessments is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact a tax lawyer.