Property Tax Adjustments

With property values dropping all around the country, now might be a good time to scrutinize the assessed value of your property and see if you can justify a reduction in your property taxes. Prices are dropping at a 15 percent annualized rate nationally. In areas where speculation buying in housing peaked, home values have dropped 30 to 40 percent. Most tax jurisdictions wait until the property changes hands before adjusting the tax, and when they do make an adjustment for you – usually the rate only goes up.

The most successful grounds for challenging your tax bill are over valued and over assessed property.

How Do Tax Authorities Assign a Value for Your Property?

Generally, they are not sending a property appraiser door-to-door to carefully measure and assess your house because the process would be too time consuming and expensive. Instead, most taxing entities try to determine a fair market value for a property by deciding what it would sell for in the current market. The size of the lot, the square footage of the floor plan the builder filed with the county when the home was built plus any building permits that added to the square footage of the house are all factors in determining property value.

Tax authorities use a myriad of ways to assess the value of properties in their district, and the rules and regulations can vary from county to county and state to state. So you need to learn the law as it applies to your area, or hire a lawyer who specializes in property tax law. There’s a Web site called lowtaxrate.com that gives state by state information on how property taxes are assessed. Visit the Federation of Tax Administrators to identify your property tax jurisdiction, records and procedures. You can check what is on file at the local tax authority for your property at sites such as Zillow.com and Trulia.com.

Appealing Your Property Tax

If you decide to challenge your property tax, most states have between two and four tiers of appeal. Before going through the process, you need to determine is it’s worth your time. For example, if you’re paying $1,000 in property taxes and getting your home reassessed drops the tax bill by 10 percent – you save $100, which probably won’t cover your time and effort. If the saving is $500 or more, then it’s probably worth it.  

Signs that your property tax may need adjustment:

  • Errors on the tax bill describing your property, or math errors in the tax records.
  • Homes in your area are selling for less than your appraised value.
  • Your neighbors have lower assessments on houses similar to yours. But bear in mind that assessed values can remain the same for years and may not reflect current market values.
  • Drainage problems, easements, re-zoning, heavy traffic and other nearby problems may reduce the value of your property.
  • Inefficient heating, structural cracks, deterioration or chronic defects are all factors in depreciation.
  • This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Tax laws in particular change frequently. Seek competent legal counsel for advice on any legal matter. If you need help with a Tax Issue please click here to consult with a Tax Lawyer in your area.
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