Taxes, The Home 
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Always Contest Your Home’s Tax Assessment

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If you own a home, every few years the state or county will come by and guess how much your house is worth and they will likely be very generous with that guess. While this high estimate will make you feel good about the state of your home and of the housing market, you will quickly lose that feeling once they send you the bill for your real estate taxes! This is where it pays to understand that you can contest your home’s tax assessment and that it’s a relatively painless process that could have a quick resolution if you’re lucky. I think it always pays to contest that home value assessment (unless you just bought your house, then your home’s value is assessed at the sale price and there’s no way you can get that lowered) because sometimes you can get lucky and just get it readjusted downward.

My friend Tony was telling me the other day how he just got reassessed and his house value was jacked up (almost unreasonably), so he went through the process of collecting recent sales, comparables, and all the other documents you need to fight the crazy high adjustment (the same things that home appraisers look at). When the time came for him to fight his case, he was all prepared and psyched up for a long drawn out battle, but his assessor just agreed that her initial guesstimate was too high and she’d lower the appraisal! All it took was one phone call!

Tony also noted that the softening housing market could be a benefit for homeowners not looking to sell because you can argue that your home is less valuable than it really is because of the housing market. If comparable sales are now lower, use those as examples of how your house lost value. If you can get over the idea that your home is less valuable (at least on paper), you can save yourself some serious cash in terms of real estate taxes.

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7 Responses to “Always Contest Your Home’s Tax Assessment”

  1. Jeremy says:

    I’d take out the word “Always” in your title because if I questioned mine I would be paying more! For whatever reason our assessed value is very incorrect. We have had numerous problems with our recent house purchase and the property taxes, but this is one problem I’m not going to question. Our assessed value is at $47,500! The home was for sale at close to $200,000 and we ended up with a final purchase price of not much more than $150,000 and we had it assessed at around $175,000 before buying.

    I don’t know what the problem is, but there is no way I’m going to bring it to anyone’s attention or contest it. Of course this probably comes at a price, because they don’t have the taxes tied to our escrow properly, our property taxes go to our old address and they still haven’t fixed it and they did not correctly file our homestead exemption. So while it is a lot of headaches, I’ll live with it if they don’t want to properly assess our home.

  2. CK says:

    I just called and got mine knocked down. Probably will save me about $300 dollars a year. Not bad for a 5 minute phone call.

  3. What your house is worth on paper and what you can sell it for are two totally different things, and your ego shouldn’t be tied to either number.

  4. Clever Dude says:

    When we got the new assessment, it went from 252,000 to 470,000 a year after we bought the house. I was proud of the increase, but knew my home couldn’t sell for that amount. I submitted a rebuttal and they contacted me soon after.

    I was freaking out about the increase because it would mean $1000 a year increase for the next 3 years in my taxes. However, they explained something very important for me.

    In Montgomery County, they have the Homestead Tax Credit, which means I qualify for a 10% cap in the increase from year to year. That means that my first year increase wouldn’t go from 252k to 470k; it would go to 277k. That’s only a $100 increase. In order to save even 1 cent, my home would need to be devalued over $193,000. That’s not going to happen.

    So although my taxes will increase $100 a year over the next 3 years, arguing is futile in my case.

  5. Ben says:

    I’d love to contest it however…… We finished out our basement, adding square footage to our home. I’m afraid if I contest it, they’ll include the new rooms and actually raise the taxes.

  6. Tony says:

    Clever Dude…You can save money. I also live in Montgomery County and may have some insight for you.

    If you successfully contest your $470k value to say $400k, then your new adjusted assessment is good for 3 years, meaning in 3 years instead of starting the reassessment process at $470, you are starting it at $400k, which will lower your base for the next assessment cycle, and so on. B/c of the soft market NOW, you can save in the future.

  7. jim says:

    BTW, that’s the same Tony as in the article so he knows what he’s talking about (as opposed to any random Tony, they don’t know what they’re talking about)


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