City Hall vs. You: Appealing Your Property Tax

Pity the tiny gecko that winds up on the meal plan of the wind spider. If caught, the fangs sink in, and he is eaten alive. Or consider the fly that’s seized by an ambush bug: first saliva is injected into the little insect, which paralyzes him while his insides are sucked out.

So, see? There are some fates worse than paying taxes.

It’s a brutal time for homeowners. Not only is the value of your house possibly plunging, the taxes that go with them? Not so much. Chances are, they haven’t dropped a dime.

Fortunately, if you think your property tax should be lower because your house is worth less than it once was, you may (keyword: may) be able to appeal and pay less.

Where Property Taxes Are Born

Obviously, either it just strikes you one day that your house’s value rivals the 1985 Buick your cousin still drives and you get angry enough to do something -- or you may have received a notice of value letter, also known as an assessment notice, in the mail. In some parts of the country, they were mailed in February, some were mailed in March, some will be mailed in May, some in June (Atlanta residents can expect theirs then) and so on; and in many parts of the country, this is only done every three years.

Either way, you’re about to get friendly with your neighborhood county assessor or county auditor, depending on what you call it in your neck of the woods.

In fact, every government entity handles things a little differently, so there is no one strategy that every American can employ when trying to bring down the tax on your property. One township does it one way; another, another way. But if you receive a notice of value letter, you can expect to have 45 days from the date on the letter to appeal your property tax, if you believe that your local government has mischaracterized the worth of your house.

And chances are, your local county assessor or auditor will accept a petition from you decrying the value of your house any time, but you’ll have a much stronger case and easier time of it if you’re buying a home, or if you recently had some serious property damage like a flood or fire. If you just feel that your property taxes are too high, and you want to get them lowered, the party line won’t be very sympathetic. But to bottom-line it: if you’re interested in getting an assessment review, you really should contact your local county’s assessor or auditor office and ask what the process is for getting your property taxes lowered.

Solo vs. Hired Gun

You don’t necessarily need to hire help to get your property tax lowered, says Michael Agetstein, the chair of the tax department for KatzAbosch, a well-regarded public accounting and consulting firm in Maryland. “The first couple steps are rather impersonal -- you can do it by telephone or in person or by writing,” says Agetstein. “You need to make sure you have your homework done, but you don’t have to be represented.”

Still, the arguments for being represented are cogent. “The advantage is that most tax consultants and attorneys are familiar with the statutory scheme of how property is valued and many, most hopefully, have an understanding of basic appraisal principles to be able to refute the assessor’s comparable sales,” says Kelley Gorry, a tax attorney at Rose Law Group in Scottsdale, Ariz., which has seen its real estate value plummet in the last year.

If you pay for help, many tax consultancies are charging contingency fees for helping to lower your property tax. If that’s the route you go, and it probably is the better route -- versus having them charge by the hour -- expect to pay 33 percent of the estimated savings and possibly up to 50 percent.

The Homework

Either way, alone or with a hired gun, you’re going to have to get some things together to prove that your house isn’t the house it used to be. Things like a real estate appraisal, which you can get from, naturally, a real estate appraiser (get a referral or try the American Society of Appraisers or Appraisal Institute). You can expect to pay anywhere from $100 to $500, depending on the size of your home. The pricier the home, the more you'll pay, but it shouldn’t be more than $1,000. Still, right there, you have to ask yourself if you’re going to spend $500 to save yourself $400.

That said, there’s a way around hiring an appraiser, says Gorry. At least that’s how it works -- altogether now -- in Arizona. The best way is the sales approach, says Gorry, which is when you collect market comparisons of similar and recent comparable sales, information that your local real estate agent has. Even if you get an appraisal, it wouldn’t be a bad idea to also have that information.

And if the reason you know your house isn’t worth what it once was is that gaping hole that’s still in your upstairs bedroom from that freak meteor shower, you’ll want to bring along any proof of structural damage. Even if there is no damage, provided you think visuals back up your case, taking along photos of your house can be a prudent move as well.

The Process Itself

Ultimately, not the county assessor but a board of review (which works independently from the assessor or auditor’s office) will decide your fate. Now, they don’t have the power to raise or lower taxes, just to determine the worth of your property, which means you shouldn’t yell at them if you aren’t a fan of the IRS. The people on the review board are usually composed of three to five members throughout your county and who are familiar with local market conditions and trends. If you’re appealing because of the 23 foreclosed homes in your neighborhood and the pack of wolves roaming through the uncut, unkempt lawns, they know all about it.

As a precaution, Agetstein suggests asking for a copy of the assessor’s worksheet, so you can see what they based their assessments on. “They may say you have four bathrooms when you actually have two and a half,” says Agetstein. “Or they might say you have a finished basement. There are a number of things that potentially they might have wrong that could help you in the appeal process.”

But while you can expect the review boards to do their jobs impartially and professionally (and if they come down against you, you should have the chance to appeal their verdict), “they’re not just going to roll over and give in,” says Agetstein. After all, property taxes are one of the county’s main revenue-generators.

Indeed. As Vic Masi, a Realtor in the South Jersey and Philadelphia region, wryly observes of his own community, “Strangely enough, when the height of the market hit in late 2005 and ’06, the township was quick to reassess all our properties and issued a hefty increase at 8 percent of the then current tax bill, but now that home prices are off by 20 percent from that time, they refuse to lower the taxes.”

And even if you do get your township to recognize that your property is worth less, Masi says, “All they do is change the rate that is multiplied per thousand and get the same dollar amount.”

Or, as Agetstein points out, due to the complex nature of the way everything is structured, you may get the property value lowered but not enough to actually lower the tax. In that case, says Agetstein, “You may win the battle, but still lose the war.”

But you’re still better off than meeting an untimely end at the fangs of a wind spider.