That’s what I did. And in one sweeping move, I was able to save $1,084!
That’s right! By protesting my county tax assessment, I was able to change the opinion of the value of the dirt beneath my feet and won!
Here’s how I was able to do this successfully, and how you can , and hopefully how you can too!
The Back-Story:
About 8 months after moving into our new house, I received my first county tax assessment notice for this house. According to them, the taxable valuable of my house had gone up $44,205. That was going to increase my taxes by $1,084 for the year!
My jaw dropped! I thought: How in the world could they assume that my property had gone up in value by $44,205 x 2 = $88,410?
The kicker was that because there was a transfer of ownership in 2015, the township was jumping on the opportunity to change my taxable value to the same thing as my assessed value (which was also way out of whack with reality). FYI – In case you don’t know, here’s the difference between the two.
There was absolutely NO way I was having this, and so I started to plot my recourse.
What Happened?
Fortunately, as with most government-related things, you always have the right to appeal or protest. This means you can “fight” the township assessor and try to get them to change their assessment.
Though this is generally perceived to be difficult to do, I had a secret weapon in my back-pocket …
As part of the mortgage process, it is required that you get a property appraisal conducted because the lender will limit the mortgage amount availability on this value.
This recent appraisal was the key!
The appraisal I had for my house was for was pretty much in line with the value that my 2015 taxes claimed my property to be worth, so I had a good feeling that it would be well received.
To get things going, I filled out a few quick forms off the township website and attended an official township assessment Board of Review where I presented my case.
About 3 weeks later, I received an official judgment from the township office stating that both my taxable and assessed property values had been re-adjusted to almost the same thing as my 2015 taxes.
I had won! There would be NO increase in my property taxes, and I had just staved off an increase of $1,084 for this year and every year to follow! Hooray!
Are You Paying Too Much in Property Taxes?
According to the website Movoto: 60% of properties in the U.S. are assessed at a higher amount than their current value.
What does that mean for you?
It means there’s a 3 out of 5 likelihood that you’re likely paying too much for your property taxes, and you may be able to get your property taxes lowered if you try. If an appraisal was to be done and the property value was found to be lower than what your local township assessor estimated it to be, then you could potentially be paying a lot less in taxes than you are right now.
The thing to keep in mind here: This isn’t necessarily just a one-time gain! Once you get the taxable value of your house adjusted, this resets the bar for today and all future tax assessments. Therefore, that +$1,000 I’m saving this year is really $1,000 next year, the year after, and so on!
Another not-so-obvious benefit: Not only is that a gain for you, but it will also be perceived as a marketable quality someday in the future when you finally go to sell your house. If I pretend for a minute that I sell my house 5 years from now, I’m sure whomever I sell it to will not want to be paying ridiculously high taxes. By keeping my taxes in check now, I’m resetting the bar and helping myself in the future.
How to Reduce Your Property Taxes:
1- Have An Official Appraisal
The cornerstone of my defense was the fact that I had a recent appraisal in my hand. Since my house had only been purchased just about 8 months ago, that meant that the appraisal that had been performed as part of the mortgage process was still valid.
Though having an appraisal may sound like common sense, I think if you were to interview a property assessor, you’d be surprised at how people actually present hard evidence. I’m sure the board of review gets their fair share of people who simply stop by, make grumpy remarks like “my taxes went up and I don’t like it”. That’s not going to work! They have no real bias to back up their argument.
Though a proper property appraisal can cost you close to $300 to $400 up front, think long term! You might save $1,000 or so this year and every year thereafter (as I’m going to), so that one-time appraisal fee might end up being small in comparison to how much you really stand to lose!
One thing you can do yourself before purchasing an expensive home appraisal to know if its even worth it: Check your local listings, and look for your own comps. Though you’re probably not a real-estate agent, you certainly are capable of going online and finding homes with similar square-footage, lot size, number of rooms, bath rooms, and expensive extras like finished basements, swimming pools, etc.
2- The Lack of “Comps”
Another thing that I’m sure helped my case to reduce our property taxes was the lack of comps that would suggest my house was worth more now than what my appraisal had suggested.
Fortunately (or unfortunately depending on how you look at it), the city I live in has had some very low availability for houses within the price range of my property. If, for example, the county tax assessors wanted to argue with my appraisal by presenting their own evidence of comps that had hit the market, then they could have done this. But they didn’t because … there probably aren’t any!
Again, another time when the depressed housing market worked in my favor! (… the first time was buying my current house for what I believe to be a steal.)
3- Be Respectful
The final thing I think really helped my case: Respect.
These are human beings making a decision. They are people who live in my community. They have a job to do, and I’m not going to walk in and pretend I know more than them.
Throughout the entire visit with the property tax assessment board review, I treated it as if it was a job interview. I spoke when spoken to, and answered in a very straight-forward manner. I was friendly, but not a grinning idiot.
But at the same time, I remained focused with my goal. When someone would try to suggest that my house was worth more than what I was trying to get it down to, I would politely redirect the conversation back to the facts; back to the appraisal I had in hand.
The folks making these decisions were entitled to have their opinions, but again it’s very difficult to argue with the number that a professional appraisal assigned.
Conclusions:
If anything, I’m hoping my story and experience with this process inspires your confidence. If you’ve got any suspicion at all that you might be over-paying your property taxes, then you should weigh the opportunity cost against getting an appraisal. If it makes sense financially, then go for it.
Remember that even if your protest gets rejected by the local assessment board, you have the right to appeal to the next power up.
Readers – What stories do you have for how to get your property taxes lowered? Who has challenged them and lived to tell about it? Were you successful, or not so much? If so, how much were you able to lower your taxes by? What do you think helped to contribute to your victory?
Featured image courtesy of Pexels
Thanks for the advice MMD, Being respectful can really help us get what we want. And, don’t shy away from tax deductions, Make a move,
It certainly worked for me!
Definitely! It’s a great return for your effort.
Congrats MMD in lowering property taxes, That’s great strategy. I’d check my neighbors to see whether they pay less tax than me, considering that we own similar homes. If it is, I could be in line for a tax reduction.
Good for you on the massive savings. That is like 3 weeks of groceries right there. I might have to review my taxes going forward to see if they try to pull the same trick on me. Thanks,
My bad meant to say months!!!!
LOL. No, you had it right at three “weeks”. At the rate our kids are eating food, that’s about how fast it goes in our house.
I don’t understand why would we even had to pay property taxes. We don’t earn anything just building a home and living within. Hence, your shared experience is going to make my months, not only a day. Thanks 🙂
Wow thank you for sharing this! Great strategy tips
Thanks! I’m glad you enjoyed it.
It is also important to find out the yearly deadlines to appeal to the tax assessment. Deadlines are crucial as the process will come to a halt if you don’t turn in your paperwork on time or show up for a hearing on a required date.
Where I live in Oklahoma one has several avenues.
You can appeal an increase but have less than 2 weeks to do so. They will then give you an appointment and you need to be ready.
It is easy to get comps here for taxes. The county assessor has to publish data. I was able to see that newer, recently remodeled, larger houses had lower assessments. I made a very detailed table with addresses, square footage, value of house and tax amount.
I also took photos of every room in the house. I showed that my house had the original tiny 1936 bathrooms. I showed that the galley kitchen had last been remodeled in the 80’s and was small. ( I like it just fine though). I photographed the basement which is horrible. I was polite. They lowed them by $400.
A year later they raised them again. At that point I was 65 and could apply for a permanent freeze. I’m still saving money because they told me that they would continue to raise them $400 a year until they had them where they wanted them. So my freeze would have been $800 higher rather than $400.
If my income exceeds $65,000 in the future or I remodel drastically they can raise the taxes again.