More Tips to Lower Property Taxes
5: Nose Around the Neighbors if You Suspect an Error
As we said before, it's extremely important that you understand what's on your property card at the assessor's office. It'll save you a lot of time challenging mistakes (or even judgment calls) if you can catch them right away. But here's a secret that folks who work at the assessor's office can tell you: A lot of people come in not to look at their own property card, but to check out their neighbors'.
And that's not just because they're nosy busybodies. Knowing how the houses around you are assessed can be quite valuable to understanding your own assessment. If you do suspect that an error was made on your assessment, it's a good idea to check houses in your hood. Do you and your neighbor have a similar property assessment, even if your neighbor's house has a huge garage and swimming pool? There might be a reason your house is valued equally, or there could be a problem with the assessment.
4: Make Friends With the Assessor
So far, we've made it sound like the assessors are shadowy figures bent on trying to wring the highest amount of taxes they can out of a property. The truth is a lot less interesting: It's absolutely in their best interest to get your assessment right. Think about it like this: Assessing property values too high doesn't do anybody a lot of good. It obviously overvalues the market, and -- this is a big one -- it doesn't help the assessors to have loads of property owners filing appeals.
Here's a thought: Remember that you can access loads of information about how assessments work from municipal websites, or you might even consider asking the assessor's office yourself in an informal meeting. If an assessor has questions about your property, you'll likely be contacted: Take advantage of the interaction by carefully explaining any discrepancies that have been noted. A lot of assessments are done without actually entering the property, but if the assessor does request a walk-through, be there to explain any improvements or deficiencies.
3: Get an Outside Appraiser
So, the jury's in: You've checked the neighbors, you've asked the assessor -- and you still think your property is being valued too high. If it's not an easy mistake that can simply be rectified by another visit from the assessor's office, it leaves you in tricky territory. While assessors are given rigid rules and regulations to determine property value, there's certainly still more room for judgment. And now you're in the uncomfortable position of challenging not a fact, but a professional opinion.
One solution? Counter with another professional opinion. While some jurisdictions won't let you hire an outside appraiser to bolster your appeal, you should consider it if yours does. Another certified professional (a member of either the National Association of Independent Fee Appraisers or the American Society of Appraisers) might go a long way in convincing the right people that your house was overvalued [source: Clarke].
2: Look at Real Estate Websites
While no one can argue that snooping through neighbors' property tax records isn't a load of fun, you might want to start out a little less "covert operation" and a little more "free time and decent WiFi connection." Lucky for you, there's a pretty easy way to build a case for appealing your property assessment: Go on some real estate websites and see what's been sold in your neighborhood lately.
Don't necessarily look at the listings. Instead, find the homes' actual selling prices. But a word of caution: Remember that the assessed value of your home isn't always going to be the fair-market value. While some assessments are based on home sales, others might be based on the cost to replace your home, plus the value of the land it's on [source: Block]. Do keep in mind that even if your home is the one dump among huge, sprawling mansions, your home is going to have some value based on the places around it. Better, perhaps, to be the sprawling mansion among dumps.
1: Forget About Challenging Your Assessment
We're not telling you to just give up if you think your assessment is wrong. If anything, it helps you, the assessor's office and even the community to correct an overvaluation. But you should know that once you start an appeal with the assessor's office, you might be dismayed to learn that your house is going to be in the spotlight.
No, that doesn't mean that evil assessors will be prank-calling your landline. But it does mean that if you have any zoning or compliance issues with your property, they'll be brought to light. "Fine," you think, "my house is just a normal home. What could be noncompliant about it?" What indeed.
Consider that bathroom remodel that you hired your brother-in-law to do. Did he get permits? Even worse, do you know whether the previous owners of your house got permits when they redid the kitchen you fell in love with? Also, did you know the top stair to your front stoop is a half-inch taller than code?
All these things may suddenly become issues you have to address right away, should you choose to appeal your assessment [source: Pulawski]. Just be sure you know what you're getting into, should you lobby an appeal.
Author's Note: 10 Tips to Lower Property Taxes
It really pays to check out the website of your assessor's office. Not only will you be able to find some useful information about how assessments work in your area, the site will probably give you some idea about when assessments take place and how to appeal, should you take issue with the valuation.
- Block, Sandra. "How to Reduce Your Property Taxes." Kiplinger. March 2014. (Oct. 10, 2014) http://www.kiplinger.com/article/taxes/T055-C000-S002-how-to-reduce-your-property-taxes.html
- Boone, Mary. "How to Fight High Property Taxes." Zillow. April 9, 2014. (Oct. 10, 2014) http://www.zillow.com/blog/fight-high-property-taxes-149121/
- Clarke, Suzan. "Think Your Property Tax Bill is Too High?" ABC News. April 2, 2010. (Oct. 10, 2014) http://abcnews.go.com/GMA/MellodyHobson/lower-property-tax-assessment/story?id=10264606
- Curtis, Glenn. "5 Tricks for Lowering Your Property Tax." Investopedia. 2014. (Oct. 10, 2014) http://www.investopedia.com/articles/pf/07/property_tax_tips.asp
- Gerstner, Lisa and Sandra Block. "7 Steps to Lower Your Property Tax Bill." Kiplinger. Feb. 2014. (Oct. 10, 2014) http://www.kiplinger.com/slideshow/real-estate/T055-S001-7-steps-to-lower-your-property-tax-bill/index.html
- Home Loan Learning Center. "What's in a Mortgage Payment?" Mortgage Bankers Association. 2014. (Oct. 10, 2014) http://www.homeloanlearningcenter.com/mortgagebasics/whatsinamortgagepayment.htm
- Investopedia. "Property Tax." 2014. (Oct. 10, 2014) http://www.investopedia.com/terms/p/propertytax.asp
- Leamy, Elisabeth. "Property Taxes Too High? Here's How to Fight the Tax Man. ABC News. Jan. 10, 2012. (Oct. 10, 2014) http://abcnews.go.com/Business/MadeInAmerica/tips-lower-property-taxes/story?id=15323503
- National Taxpayers Union Foundation. "Are You Paying Too Much in Taxes?" (Oct. 10, 2014) http://www.ntu.org/foundation/page/are-you-paying-too-much-in-taxes
- Pulawski, Shirley. "How to Lower Your Property Taxes, and When Not to Try It." Huffington Post. Dec. 12, 2013. (Oct. 10, 2014) http://www.huffingtonpost.com/mybanktracker/how-to-lower-your-propert_b_4378639.html
- Tergesen, Anne. "How to Reduce Your Property Taxes." Bloomberg Businessweek. Nov. 4, 2007. (Oct. 10, 2014) http://www.businessweek.com/stories/2007-11-04/how-to-reduce-your-property-taxes
- Willnauer, Keith. Whatcom County Assessor. Personal interview. Oct. 9, 2014.
Many Americans don't think about their tax bills until the new year. But there are things you need to do before Dec. 31 if you want to pay less later.