Property taxes are rising right along with the cost of food, gas and other necessities. One main difference: You won’t have to wait for inflation to come down to lower your property taxes. And you can do it all yourself.
“Most people are under-assessed, but the market is changing,” said Alison Tulio of Incenter Tax Solutions, a company that appeals property tax assessments on behalf of homeowners. The company works with a network of 10,000 local appraisers and attorneys across the country. “Values are declining, which means more and more people will [soon] be over-assessed. That’s when you can appeal.”
It’s not hard to protest your tax: Just follow the instructions that come along with your tax bill. I once did it.
All I had to do was find out which houses were being used by the local assessor’s office as comparables for mine. Then I went to these houses, giving each of them a once-over to determine how they differed from my place. I couldn’t get inside, of course – didn’t even try – but the exterior differences were enough to make my case.
Once equipped with my list, I made an appointment to discuss my findings on the phone. The woman on the call was very nice, listened to me politely, asked a few questions and said I’d be hearing from her office in due course.
A few weeks later, I received a letter telling me the assessment had been lowered. I don’t remember by how much, but it was sizable enough for me to think it was well worth the little bit of time and trouble I put in.
Hire Some Help
If you’re too busy to do the spade work yourself, there are companies that help people object to their high tax bills. They’ll do the research and make the case on your behalf, following the rules of your county.
What’s more, they claim an extremely high success rate. Since it launched in 2021, Incenter claims a 93 percent success rate for residential appeals and 98 percent winning percentage for commercial properties. The company said that last year, it cut its residential clients’ tax bills by about $4,000, on average.
Of course, there’s a fee involved. In Incenter’s case, there’s no charge to review a case and no charge if the appeal is not successful. If the company wins your case, though, you owe half of the first year’s savings. Every year after that, the savings are all yours because your house will continue to be taxed at a lower figure until it’s reassessed.
There are plenty of local outfits that will appeal your property tax, including some lenders and real estate brokers. Tulio herself appealed tariffs for hundreds of property owners in Pennsylvania and New Jersey before becoming Incenter’s president. But her company is one of the few national firms offering the service.
Again, though, you can always file an appeal on your own. Tulio said it is incumbent upon all homeowners to check their tax bills every year. If you think you were over-assessed, you should file an appeal, with or without professional help.
Most People Put Off
Unfortunately, in Tulio’s experience, most people don’t. Many just don’t bother, she told me, and some miss the deadline. But others are intimidated by the process or don’t know what evidence they need.
Usually, the rules are pretty cut and dry. But no one tells you how to prepare, Tulio warns. That’s where the professionals come in.
“It’s scary to attend a hearing,” she said, “and if you don’t know what you’re doing, if you don’t present the right information, you can open up yourself to a higher assessment. It’s not a game people want to be playing.”
If you decide to go it alone, pay attention to the appeals deadline. You may have only a few weeks to get your ducks in a row. Next, determine how your property is assessed. This process varies among local tax authorities, but most use a percentage of the assessed value to calculate the tax. So if your house is assessed at $500,000, and the assessor bases the tax on 75 percent of the value, the tax will be for a $375,000 property.
“There are two numbers involved: assessed market value and actual market value,” Tulio explains. “If your actual market value is lower than the assessed market value, you are over-assessed and should appeal.”
Check for mistakes
Now check for mistakes in the tax documents. Is the square footage correct? Number of bedrooms and baths? Do the records show you have a garage when you don’t? Look for errors online or by going to the assessor’s office. Discovering a major error could result in cutting your tax bill without having to appeal.
The next step is to compare your property to others like it in your neighborhood. Talk to your neighbors to see what they are paying. You may be getting off cheap, or you could be paying too much. And look for recent sales in your neighborhood to see if values are still on the upswing, holding steady or declining.
Finally, when you file, arm yourself with photos, repair estimates if applicable, and perhaps even blueprints. Anything to support your case.
If you win your case, the savings won’t just be for the current year. You’ll pocket the difference at least until the next assessment – which could be three, four or five years away.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at email@example.com.