Appealing property taxes

[Philip Beckwith]

Does anybody have any tips on how to successfully appeal property taxes? We bought a property that we feel is assessed by the our local government too high. Our strongest case is that our bank appraisal says it should be much lower. Our purchase price was about the same as the bank appraisal. Any strategies beyond this would be appreciated. Thank you in advance.

[Greg Scott]

We've always hired a tax protest company and have done so in three different states. (Michigan, Indiana, Texas)  They know exactly what to say and what evidence to present. Typically they charge a percentage of the amount saved. 

On the other hand, with an appraisal near the purchase price, that should be enough in this case.

[JD Martin]

Quote from @Philip Beckwith:

Does anybody have any tips on how to successfully appeal property taxes? We bought a property that we feel is assessed by the our local government too high. Our strongest case is that our bank appraisal says it should be much lower. Our purchase price was about the same as the bank appraisal. Any strategies beyond this would be appreciated. Thank you in advance.

 You need to know the appeal laws where you are. In some areas the window is only open at reassessment and only for a certain number of days. In general, government will set the assessed value lower than market value at reassessment in order to neutralize appeals. I appealed mine once and appeared before the board and lost unanimously. Unless you are talking serious money, which I would say is 2k or more in excess taxes, it may not be worth your effort.

[Account Closed]

Quote from @Philip Beckwith:

Does anybody have any tips on how to successfully appeal property taxes? We bought a property that we feel is assessed by the our local government too high. Our strongest case is that our bank appraisal says it should be much lower. Our purchase price was about the same as the bank appraisal. Any strategies beyond this would be appreciated. Thank you in advance.

 Hiring a tax protesting company is the way to go! 

[Philip Beckwith]

Thank you for your input! 🙏🙏🙏

[Drew Sygit]

@Philip Beckwith typically in Michigan, you can only do a tax appeal in February.

The instructions will be on the back of your winter tax bill.

You will need to have great comparables to challenge the City Assessor's valuation. You'll also need to know your rights because the Review Boards often try to intimidate owners.

[Kevin Sobilo]

@Philip Beckwith, I disagree with some who think this should only be attempted for larger gross errors and also that you need to hire a company to do it. A company that specializes might be a good idea, but if that isn't practical because the potential difference in taxes isn't that great it is something you can do on your own.

Everyone say's appraisal appraisal appraisal. An appraisal can be good, but it is an OPINION of value. I would start by looking for FACTS!

So, for me, step #1 is to review the data the assessor has on my property. If you carefully review it, you may find FACTUAL ERRORS! Facts win virtually all of the time! For example, on one house I found that they had measured it wrong. They had an unfinished space counted as finished space increasing the size of the home by ~10%. That in addition to my other arguments got me a 20+% reduction in assessed value!

If you have no facts, then yes an appraisal can be your ticket, but also keep in mind how your state manages assessed values. Do they update them yearly? Or do they apply an equalization ratio.

In my state they are NOT updated yearly so the values are those from the last year a reassessment was done in that county which might be 2008 or 1965. So, normalize those values, the state each year will determine the ratio by which the assessment differ's from today's values. For example, if the assessment was last done in 2008 the ratio might be 85% meaning that a $100k house today would be assessed at $85k because that is about what it would be worth back in 2008.

[Philip Beckwith]

@Drew Sygit thank you for your input! Have you successfully appealed before?

[Philip Beckwith]

@Kevin Sobilo thanks for your suggestion. We have an appraisal that says our house is worth much less, and I think it makes sense. I never thought about maybe they are assessing it based on wrong fundamentals such as you said. It was held by the previous owner for a very long time, so I wouldn't be surprised if some basic facts about the house are incorrect.

[Drew Sygit]

@Philip Beckwith many times, but have also lost a few times.

You pick your battles.

[Kevin Sobilo]

Quote from @Philip Beckwith:

@Kevin Sobilo thanks for your suggestion. We have an appraisal that says our house is worth much less, and I think it makes sense. I never thought about maybe they are assessing it based on wrong fundamentals such as you said. It was held by the previous owner for a very long time, so I wouldn't be surprised if some basic facts about the house are incorrect.

I was making an offer on a house a couple years ago and discovered that the owner was paying taxes on an additional house that was on the neighbors lot and didn't know it! They had been paying those extra taxes for ~10 years since the last tax reassessment.

When the house eventually sold, I contacted the buyers agent and explained it to him so he could be the hero with his clients and show them how they could save a bundle on their property taxes by appealing and getting that corrected!

[Jason Malabute]

Philip, it really depends on your county’s housing authority. For example, I own two large multifamily buildings, and when I tried to get a tax exemption for them, I had different experiences. One housing authority wouldn’t even entertain the request, while another was open to it because it was an affordable housing property, requiring just an application for the exemption.

From my experience, dealing with government agencies, especially when trying to save money or get financial benefits, can be a slow process. Be prepared to follow up multiple times, using different forms of communication—calls, emails, and if possible, in-person visits to their office.

[Philip Beckwith]

Quote from @Jason Malabute:

Philip, it really depends on your county’s housing authority. For example, I own two large multifamily buildings, and when I tried to get a tax exemption for them, I had different experiences. One housing authority wouldn’t even entertain the request, while another was open to it because it was an affordable housing property, requiring just an application for the exemption.

From my experience, dealing with government agencies, especially when trying to save money or get financial benefits, can be a slow process. Be prepared to follow up multiple times, using different forms of communication—calls, emails, and if possible, in-person visits to their office.

Thanks for the reply. I am pretty much expecting red tape but hoping to be surprised.