6 Steps to Contest Property Taxes

Do you pay an exorbitant amount of property tax on your home? You don’t have to accept the status quo.

First, find out if your city, town, or county is providing relief due to the COVID-19 outbreak. Some have already extended deadlines or made other adjustments. Others are expected to follow.

But that’s not the entire story. Whether or not your city, town, or county provides any relief in 2020, your home may be overvalued, causing you to pay more property tax than you really should. And, with deductions for property taxes strictly limited or nonexistent, depending on your situation, you are even further behind the eight ball.

Fortunately, you can generally appeal a property tax assessment if you have reasonable grounds for doing so. The National Taxpayer Union (NTU), an independent advocacy group, has estimated that about 60% of property in the U.S. is over-assessed. If your appeal is successful, your property tax bill will be reduced.

However, you must move quickly. Usually, you will have 90 days after receiving your current tax bill to initiate an appeal, but in some cases, it is only 30 days. Here are six practical suggestions for completing the process in time.

  1. Verify the dimensions. Examine the property tax notice to see if it overstates your home’s dimensions. If your house has less square footage or fewer rooms than the notice states, chances are it has lower value, too.
  2. Look for mistakes. Some Assessors do not even look at the property. Instead, they compare descriptions of the home with seemingly similar ones in our neighborhood. Even if the numbers are accurate, it’s possible that your home is overvalued. It could be located near a busy highway, or in a flood zone, which lowers its value.
  3. Check the comps.  On the other hand, this is often the easiest way to prove that your home is overvalued. Find assessment numbers on homes like yours – in terms of size, age, and location – from your local assessors’ office or online. Compare at least a half dozen comps to see if most assessed values are lower than yours.
  4. Cut through the red tape. If your assessment seems high for any of those reasons, contact your assessor’s office. Supply them with all the relevant information, including photos, data on comps and so on.
  5. Seek an appeal. Don’t automatically concede if this doesn’t result in a change. You can still lodge a formal appeal with the local assessment board. (Before your appeal, view somebody else’s public hearing, if possible. You will learn how the board works and get a sense of the best arguments.)
  6. Hire a pro. If you don’t have the time or inclination to fight city hall alone, consider hiring a property tax consultant or attorney to do the legwork. Fees may be charged by contingency (e.g., 25%-50% of the amount saved in the first year), by a flat rate or hourly.

Is it worth all the trouble? Probably. Don’t forget that the savings in the first year will compound over time.

Small Business Tax Strategies
August 2020