The amount of property taxes you pay is directly linked to your tax-assessed value – what the city thinks your home is worth. The higher the assessed value – the more you will pay in property taxes.
Related: How to Reduce Your Mortgage Penalty
If you feel your property is assessed too high, you have the right to file an appeal with your local appeals board.
I recently spoke to a coworker who was able to convince the city his home was assessed too high. He received his assessed value from the city and through a process that took nearly two months, he lowered his assessed value (and annual property taxes).
Related: Property Tax Comparison
Here is how he successfully fought his tax assessment – and how you can too.
Use Current Market Information
When fighting your tax assessment, your main goal is to show that your property was worth significantly less than the assessed value (on the date it was assessed).
One way to do this is to arm yourself with comparable houses that have recently sold for less than your house was assessed at.
In the case of my coworker, he consulted a realtor who gave him the sale prices of 4 houses on his block that sold for significantly less than his house was assessed at. Each house had slightly different features but they were all relatively comparable.
It’s important to use current sales data of comparable houses that have sold for less – not just houses that are listed for less.
Highlight the Drawbacks of Your Home
You will also need to point out features of your home which show it is worth less.
My coworker highlighted the fact that his backyard is backing onto a major thoroughfare – and as a result has much more noise than other homes in the area.
He also highlighted the fact he hasn’t done any major renovations in 15 years and the fence is falling apart.
While pointing out these facts, it became clear that the city used historical sales data to determine his home’s value and wasn’t aware of the specific things that made his home worth less than the assessed value.
In his case – being near a busy road and a fence that desperately needed repairs are things the city assessment likely wouldn’t take into account.
Perhaps your home is near train tracks, close to a major highway or located in an undesirable corner of the neighborhood.
Whatever the case – use the drawbacks specific to your home to show that it isn’t worth as much as they think.
Get an Independent Assessment
One of the most effective ways to show that your home is worth less is to have an independent assessment done.
A local realtor will likely be able to give you a value (or specific range) for what your home is worth using current market data.
My coworker happened to play squash with a realtor who was able to pull sales data of houses in the area that have sold for less. The realtor then gave him an estimate of what his house is worth relative to others on the same block.
The more data you have showing it is worth less – the better.
How to File an Appeal
The easiest way to dispute your assessed home value is to visit the website of your local jurisdiction and follow their instructions on how to file a claim.
Each city is slightly different but most will have an outline on how to appeal.
Be sure to include as many facts as possible using current sales data, an assessment and all drawbacks of your home that the city may not be aware of.
Also, file your claim in a timely manner since most cities have a deadline for filing. There may be a fee involved so you’d need to determine whether the difference in value of your home (and resulting saved taxes) is worth it.
In my city it costs $30 to file a claim and the city says it takes 3-4 weeks to process – although I’ve heard it can take longer.
My coworker mentioned the process was a bit time consuming but worth it – he saved approximately $500 per year on his municipal taxes due to his lower assessed value.
He was able to convince the city his home was worth less by using current market data, an assessment from a realtor and highlighting the drawbacks specific to his home that the city likely wasn’t aware of.
Have you ever disputed the municipal value of your home?