How to Lower Property Taxes on Your Home

Be proactive to ensure your home's value is properly assessed.

In most areas, property tax is based on how much your property is worth — good news for homeowners in areas experiencing a decline in home values. However, don't expect your appraiser to automatically lower your property taxes. You need to file an appeal to reduce the assessed value of your home, which can result in lower property taxes.

Instructions

1. Visit your local tax assessor's office or website to get a copy of your property card. Property taxes and assessment reports are public information. Review the report to ensure the accuracy of the information your assessor used to determine your home’s value. Unless you recently bought your home, an appraiser the tax assessor hired produced this report. The appraiser most likely had to assess thousands of properties and may have made a mistake or an incorrect assumption about yours. If you find a mistake, you can use it as evidence when you appeal for a property tax reduction.

2. Check the comparable homes the appraiser used in his report to ensure all truly compare. It is not unheard of for an appraiser to lump all homes in a given area; thus, if your home is smaller or has fewer improvements than other nearby homes, you have a solid case for lowering your property taxes. Check out the property cards for these homes and drive by each one. Take note of anything that would make these homes worth more than yours, such as curb appeal, new roofing, brickwork or new siding, fancy landscaping, a shed or fence. Make sure you also note anything that would lower the value, such as a nearby railroad track or busy highway. Take pictures of any evidence you plan on using in your appeal.

3. Check recent sales of comparable homes in your immediate neighborhood or area. Many realtors will compile this information for a small fee. Choose nearby homes that have the same square footage, number of bathrooms and lot size. Don't include homes sold under unusual circumstances, such as an impending foreclosure or a sale between relatives. Take note of anything that would influence the value of these homes, such as number of fireplaces, kitchen upgrades and flooring type. Even intangibles like an excellent view can make a property more valuable. Many agents provide this information in the MLS listing.

4. Take a close look at your own home to find evidence the assessed value is too high. Things like an outdated air conditioning system, cracked foundation or bad drainage can lower your home value. If you made changes to your property since the last assessment, such as removing a fence or shed, you may have lowered the value and can argue for reduced property taxes. Some other things that can lower your home's value are removing a bathroom to make room for a closet or a storm knocking down several large trees. Keep in mind that any improvements you have made since it was last assessed will increase its value.

5. Compile all the information you have gathered about comparable homes and recent home sales onto a spreadsheet along with your own home's information. Compare your home line-by-line to each of the other properties. If you can find evidence that homes similar to yours are assessed at or selling for a lesser amount, you may be able to obtain a lower assessed value, meaning lower property taxes.

6. Visit the tax assessor and discuss the information you found. Remain polite. If the tax assessor doesn't agree the assessed value of your home is too high and you should have a lower property tax, find out why. You will make a better case if you understand the rationale for the tax assessor’s determination.

7. File a formal appeal with your county board, filling out the appropriate form. Use certified mail. If you hand deliver, get a receipt. You should get a notice in a few weeks that the board received your appeal. Depending on the size of your county, you may have to wait several weeks or even months before your hearing. If you want to lower your current year property taxes, make sure you file the appeal before the deadline your municipality specifies.

8. Prepare yourself for the hearing. Organize your evidence and take photo backup. Prepare and rehearse a short presentation. While you are waiting, attend a hearing or two to gain familiarity with the procedure. Pay attention to the types of questions the board members ask and what they expect to see.

9. Dress in appropriate business attire and present your evidence professionally and confidently. Make sure your presentation lasts only a few minutes so board members have time to ask questions. If you win your case, you will enjoy reduced property taxes. If you lose, you can appeal to the state.

Tips & Warnings

• You still need to pay your current property tax bill, even if you are appealing for lower property taxes. If you win, you will receive a refund of the difference.

References

• Bloomberg Business Week: How to Reduce Your Property Taxes