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How to Contest a Property Tax Assessment

In Maryland, home property tax assessments work on a three year cycle. Every three years your home is evaluated for property tax purposes and you have that one opportunity to contest the new assessment. The schedule for your area may be different but the process is the same. In another year or so, it’ll be our turn to be reassessed and we’re hoping that lowered home prices means lower property taxes.

Maryland also has a Homestead Tax Credit [3] that caps the year over year increase of assessment value to 2-10% (depends on the county). Anything above 10% each year is given as a tax credit so that your cost doesn’t increase more than 2-10% a year. You have to be the owner of the property and live in it as your principal residence to qualify.

So every three years you get the opportunity to contest the property tax assessment and here’s a scenario in which you want your home value to go down. The cheaper they assess your property, the fewer dollars you pay in property taxes. It may make you feel good to learn your home’s value has increased but it hurts your wallet! The only solution is to contest their assessment and here’s how.

How to Contest a Property Tax Assessment

The first step is to read the assessment appeal process for your jurisdiction (here it is for Maryland [4]). Each jurisdiction uses a slightly different process for contesting your assessment. For example, we don’t have to wait until our assigned assessment year to appeal, we can file a petition for review in the two off years. (from here on out we’ll discuss the appeals process in Maryland terms, though your state and county may be similar)

The next step is to collect data from recent sales in the area of similar homes. When a house is appraised, they usually look at recent sales figures or compare it against the values of homes in the area. Then the appraiser makes adjustments based on the unique characteristics of your home, versus the sales listings or comparable homes. You should do something similar in building your case.

Tips for collecting data:

In Maryland, you first present your case to the Supervisor of Assessments. He or she can grant or reject your contest of the property tax assessment. If it is accepted, you’re done. If you are rejected, the next step is to bring your appeal up to the Property Tax Assessment Appeal Board within 30 days of rejection. You’ll present your case again, this time against the assessment office (you can get a list of the properties they consider “comparable” by filing a request).

After this point, if you still don’t get what you like, then you’re getting into the serious judicial system. The Maryland Tax Court is next followed by the actual judiciary system where you’ll likely need legal counsel. If the Appeal Board doesn’t render a favorable decision, I’d probably drop it.

Have you ever contested a property tax assessment? If so, any tips and tricks to share?