5 Steps to a Successful Property Tax Appeal

Have you been handed what you think is an unfair property tax assessment? This is an all-too-common problem for property owners. The good news, however, is that tax assessments can be appealed.

Understandably, if you don’t have any tax or legal experience, you may not know what to do or how to get started with tax planning for your property, especially regarding property tax appeals.

Here are some steps to take that will help you handle a property tax appeal like a pro.

What Is a Property Tax Assessment?

Property taxes are based on the value of your home. This is a particularly important consideration for people looking to buy and flip homes, as improvements made to the property will likely lead to significantly higher property tax costs.

Property tax assessments are carried out by a property tax assessor, an official employed by your local county authority. Assessors examine your property, comparing it with similar properties and considering factors like whether the property is residential or used for business.

In making their assessments, they may apply the cost approach, a real estate valuation method that accounts for the costs of improvements to a property and the underlying value of the land on which it was built. Alternatively, your property may be assessed by its market value or income-generating potential.

Even though the factors that determine your property’s assessed value are objective, how individual assessors may interpret this data may differ. This means there is a high chance of receiving an inaccurate or unfair assessed value for your property.

Steps to a Successful Property Tax Appeal

If you’re currently dealing with what you think is an inaccurately assessed value for your property, there are steps to take to fix this.

Getting your appeal filed in a timely, organized manner could be the difference between success and failure. While these five steps won’t guarantee a successful appeal, they will help ensure you present a logical, coherent case to the authorities.

1. Review the assessment for accuracy

Before considering an appeal, it is important to understand how a property assessment is conducted. You can request a copy of your property’s assessment report from the county assessor’s office.

Your most important task at this stage is to read the report thoroughly and cross-reference any figures with publicly available data. For example, you can and should cross-reference things like the precise size of the property, the number of bedrooms and bathrooms it has, the average property price in the area, and so on.

Given the potentially technical nature of a property assessment, it would be a good idea to interview multiple real estate agents. These professionals will have access to resources like databases, real estate virtual assistants, professional networks, and legal contract analysis, putting them in a better position to undertake an analysis of your property’s assessed value.

As Mark Pierce, CEO of Wyoming Trust, puts it, “While reviewing a property assessment is something you can do on your own, hiring a real estate professional or a lawyer might be a good idea. Not only do such professionals know what to look for and have better resources for this, but they’ll also likely be able to devote more time to scrutinizing the assessment than you might.”

2. Research comparable properties

One telling sign of a wrongful assessment is that your property has been assessed at a higher value than comparable homes in the same area.

Look for properties within the same area that are similar in size, age, and condition. Additionally, real estate websites, public records, and local real estate agents can be valuable sources for finding and assessing comparable properties.

Jonathan Feniak, general counsel at LLC Attorney, says, “Lots of people underestimate just how helpful a bit of due diligence can be in making their case. Getting a real estate lawyer to look over the data and dig into the facts can make a world of difference in any property tax appeal.”

3. Gather the evidence

Once you’ve seen enough by reviewing your assessment report and comparing it with other properties in the area, it’s time to compile the evidence. Don’t leave anything to chance. Building a strong case by compiling as much evidence as possible is always the smart move. The more the evidence, the better your chances of getting a fair decision.

4. File your appeal early

In most cases, you’ll be able to file your appeal online. However, in some states, you’ll need to do this physically. The most important thing to remember is to ensure that you file your appeal accurately and early.

Alan Parkes, owner of Roofcorp of Metro Denver and Colorado Springs Roofing, advises, “Property tax appeals tend to have strict deadlines, so you’ll need to act quickly. The precise time frame for filing an appeal varies from state to state, so you should check with your local assessor’s office to be certain how much time you’ll have.“

Whatever the case, be sure to double-check all instructions and ensure you’ve included all the required information.

5. Follow up

After the hearing, it would be a good idea to follow up with the appeals board to ensure that they’ve received all the information they need. You should also keep records of all correspondence and decisions related to your appeal, as these may be useful in the future.

Getting Started

If you’re considering filing a property tax appeal, these steps will help you prepare and present your case effectively. As we’ve advised, hiring a lawyer to help you go through this process effectively would be a great idea.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.