As property tax bills start arriving in mailboxes, many homeowners might be surprised to find their assessed evaluation is higher than they anticipated.
According to the National Taxpayers Union, between 30 and 60% of taxable property in the U.S. is over-assessed. What’s more, middle- and lower-income taxpayers’ properties are among the most often over-assessed, yet fewer than 5% of taxpayers challenge their assessments.
Although assessment procedures and requirements vary by state, property tax is calculated by multiplying the assessed evaluation amount and the millage rate, or the tax rate on assessed value determined by local government.
A notice of assessment is then mailed to the taxpayer stating the current value of the property as determined by the county assessor. If homeowners feel that they’re being unfairly taxed based on comparable homes in the area, they should start by contacting the county assessor’s office, says Richard Borges, president of the Appraisal Institute.
“However, don’t assume that the assessor is out to get the property owner,” he says. “Assessors are charged with establishing equity in assessment unless the jurisdiction has some other type of regulatory or legislative control of the assessment process.”
When to Initiate an Appeal
Homeowners may want to consider initiating an appeal if their state’s jurisdiction is based on market value and their particular property’s value has decreased significantly below the assessed value on their tax bill, recommends Borges.
“Aside from inaccuracies, the best chance a consumer has of winning an appeal is to show a lack of consistency between their home’s value and other comparable homes in the neighborhood,” he says.
A discrepancy usually comes to light after an appraisal or when the property is refinanced or sold, says Evans Hale, property tax consultant at Campbell & Brannon Property Tax Services LLC.
“The appraisal value and/or the sales price in either case is compared to the county’s value and this will give a good indication if the value is fair,” he says.
A current homeowner with intentions to sell the property may want to challenge the assessed value if they feel it is too high and could scare away prospective buyers.
“Proactively as the current homeowner, I’m not being taxed at that assessed value but I’m trying to lower that assessed value to make it a more attractive home to buy from someone who would then be taxed at that assessment after the transaction closed,” says attorney Dan Penning.
Read more: http://www.foxbusiness.com/personal-finance/2013/04/05/how-to-appeal-property-tax-evaluation/#ixzz2PsWuxO82