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Contesting Real Estate Tax Assessments

Posted By Jim On 01/19/2006 @ 9:35 am In Personal Finance,Taxes,The Home | 8 Comments

About a month ago I received a tax assessment on the house I just bought and it, predictably, jumped to to around how much I paid for it. I began researching how I could go about contesting the property tax assessment because I didn’t want to pay so much in property tax but the situation looks bleak. On a philosophical level, I like paying taxes because they fund the very services I use every day but that won’t prevent me from legally finding ways to lower my burden (I think that will resonate with many people everywhere).

There are two reasons why the assessed value of a home would increase: natural market appreciation in the value of the home as a result of time, and, a change in ownership. I found myself in the practically incontestable second category.



In general, the assessed value of your home is supposed to be a percentage, set by law, of it’s true market value. Typically is a little bit lower but sometimes, for any number of reasons, it can be much higher than the market value.

Change In Ownership:
The new value of the home will be pegged to how ever much the new owner paid for it, which I think is probably fair to everyone except the new owner (with respect to taxes). Like baseball cards, the home is worth what the next person or family is willing to pay for it. In this particular instance, it’s very difficult to contest the value of the home for two reasons: 1) On a psychological level, you’re admitting to having overpaid for a home; 2) Much of the evidence you’ll need to prove a lower market value will not be there, such as comparable home sales. However, if you’re plucky, read onward.

Appreciation of Market Value
If a flurry of homes sell in your neighborhood, yet you stay put, you might be in for a shock because the market value of the home has increased, see comparable home sales as evidence. The best strategy is to visit your local assessor’s office and review the assessments of your neighbors who live in comparable homes (size, age, etc.). If they’re being charged substantially less, you have a shot.

Other Considerations:
Market value is actually only one of the factors you should check on your assessment. Mathematical or clerical errors are also possible so you should check the details of your particular lot or house (make sure everything matches). I mentioned earlier that the assessed value of your home is supposed to be a percentage, set by law, so you should look that up to see if the percentage is accurate.

I think I’m oversimplifying the contesting process, considering there are tons of books on the subject such as Challenge Your Taxes : Homeowner’s Guide to Reducing Property Taxes [3] by James E. A. Lumley or Appeal Your Property Taxes — And Win – [4] by Ed Salzman (I might visit the local library to see if they have copies) so if I’m way off base, let me know.


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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/contesting-real-estate-tax-assessments.html

[3] Challenge Your Taxes : Homeowner’s Guide to Reducing Property Taxes: http://www.amazon.com/exec/obidos/ASIN/0471190659/ref=nosim/easeoftravel-20

[4] Appeal Your Property Taxes — And Win –: http://www.amazon.com/exec/obidos/ASIN/1882877012/ref=nosim/easeoftravel-20

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