What to expect to property tax appeal hearing.

Question

I purchased 3 properties last year that I contested the taxed value on and I am finally scheduled for property value hearing in October.

I am being over taxed on all 3 properties by a fairly large sum and I have my purchase price/comps/ and appraisal to prove the market value.

Is there anything I should be prepared for at this court hearing?

Kyle J. · Answer

Adam, having been through this process before myself (and watching quite a few people go before me), I can tell you that the most important thing was solid comps to justify the value you are requesting it be lowered to.  That means real comps from SOLD properties that you are using as comparables, and not estimated values from sites like Zillow, Trulia, etc.

Almost every single person that contested their home's assessed value before it was my turn had numerous printouts of other "comps" in their area from Zillow, and they were quickly informed that wouldn't cut it and their request to lower their property's assessed value was denied.

However, when it was my turn I used actual recent sales (plus a recent appraisal) to prove my point and I won my case and had my property's assessed value lowered to what I requested.

Speaking of comps, make sure they are recent and within the allowed time period.  When I went through it, any comps used had to be within a specified time period.  If that's the case in your county also, then make sure the comps you're using were actually sold during that period otherwise they won't be considered.

Good luck!

Arlan Potter · Answer

Marcus,

It is(may) be different in different localities, but in my area, it really doesn't matter what the neighbors rate is because over time a homeowners rate will slowly go down. And homeowners get a "homestead" exemption. Also each time a property sells the new owner has to complete a document stating what the property will be used for. So you have to let them know that it is a rental. The assessor then uses an income multiplier. I have successfully argued some down a little. But some others I have kept my mouth shut because the rate is pretty good compared to some others I have.

This brings into light another issue. If you use the current tax rate to calculate your expected income on a property you want to purchase, you may be in for a surprise in a year or so when the new tax rate takes effect.

That being said, appeal if you like, it usually can't hurt.

Marcus - I like your last statement.  The optimism of expecting a government employee to be reasonable, and that they must do something. I have been battling the assessor and code enforcement, and other local officials for years. We get along, but not always without friction. And they usually don't budge, they are rule followers. Unfair doesn't matter. That is the way governments work.

Chad Brizendine · Answer

Hi Adam,

I can remember my first hearing like it was yesterday... I had a recent appraisal, comps of every house sold in the respective neighborhood in the tax year, inspection report of things that needed work on the house (should lower value) and finally my settlement document of what I paid for the house in the tax year. How could I lose?

At the hearing I presented my case, confident, prepared with sharp and pointed criticisms for the assessor's case. She simply found the top comps and said, "hey look, you should be happy with your assessment!".

Then the time of reckoning... that little piece of mail from the township came, eager to see how much I would save, I couldn't wait to get back from the mailbox to open it! After asking for a 25k reduction in assessed value, they gave me 3k. Woe...

I fumed for about a week. Then talked to a mentor that owns dozens of homes. He said quite frankly, "Go in with low comps to get the hearing date. Then go to the hearing with these comps and pretend like you're getting ripped off."

Bottom line, don't waste a bunch of time like me. Get some low comps, get to the hearing and get what they will give, every year.

Hope this will save some, time, headache, sense of worth...

Best of luck!!

Chad

Marcus Curtis · Answer

Adam,

I think the one thing to keep in mind when it comes to appealing your property taxes is that it has nothing to do with the true, market value of the property. The assessments are based off the millage rate (% per every $1,000 in assessed value). It has nothing to do in most cases with the income of the property, the real market value of it or anything else.

Your goal should be to convince the assessor that your taxes are unfair in comparison to neighboring properties within your neighborhood. So, the best thing you can do to be prepared is to point out to them that the Johnson's house down the block has a annual property tax $500 less than yours and the Peterson's house has a property tax $800 less.

If they cannot offer any reasoning behind the higher tax basis then they will have to reduce their assessment.

Adam Craig · Answer

How does he have to know its a rental. What if I was living in it - I could still appeal the taxes. Then there would be no rent to multiply it by.

Arlan Potter · Answer

in my area, the assessor does not care what I paid, or an appraisal. All he wants to know is what it rents for. He uses an income multiplier. It is hard to argue with the multiplier. Sometimes he moves a little my way. But not much.