How to Dispute Real Estate Tax Increases
The bursting of the real estate "bubble" in the early 21st century generated thousands of disputed increased home and commercial valuations that resulted in higher property taxes. As with most real world issues, there are protocols that need be followed to win a dispute. Unfortunately, many waste valuable time reinforcing the dispute and expressing their dismay. Taxing entities should be deluged with factual data, not merely unhappy feelings and rhetoric.
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Things You'll Need
- Real estate valuation and tax bill
- Data on neighborhood property valuations
- Computer and printer
Instructions
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Dispute Real Estate Tax Increases
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Obtain information about the proper process to review and appeal property valuations and taxes in the appropriate jurisdiction. The city, town, or county in which the real estate is located will have a written, public procedure for property owners to petition the local tax assessor to review and, hopefully, modify the current valuation and tax level.
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Ask the taxing agency how they determined the current valuation. They typically may have contracted with a consulting valuation company, physically examined your home or business on a "drive by" (externally) basis or performed a walk through, or simply analyzed the prevailing fair market values (FMVs) of representative properties in the area or neighborhood. This is important. To successfully dispute property tax increases it is imperative to understand the process used by the tax assessor.
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Visit or call the tax assessor's office to get all initial forms or documents that must be filed to initially dispute the current tax increase. Don't forget to download or pick up any instructions that explain how to properly complete the form. Filing such a document usually places one in the queue for, what is often, a rather informal hearing before the tax assessor or a small board of his/her representatives. State the argument against the increase calmly, forcefully, and confidently.
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Prepare a presentation to attend a more formal hearing should the first request be denied. Property owners are usually allowed to restate and further formalize their "case", augmented with additional and convincing hard data. Prepare the argument well. For example, if the assessor used common or average valuations for the neighborhood, try to show that the subject property does not fit this profile. Accumulate third party data that reinforces this argument. If recent sales (the best way to establish FMV) were for neighboring properties that were larger or more valuable then the subject property, list the factual reasons for this difference.
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Procure relevant tax records for neighboring properties to learn if they support the dispute. Use this public data as part of the formal argument for tax reduction. If this information supports the dispute, they will be quite valuable as these are the tax assessor's own records on which his/her office depends. Using this data as a key component to the argument often leads to success as tax assessors have difficulty refuting their own legal information.
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Tips & Warnings
Always check the tax assessor's calculations, as humans and computers can make errors.
Compare assessments for at least five or six neighborhood properties to build a meaningful, solid argument.
Clearly show the differences between the subject property and the others in the argument. Leave nothing to the assessor's imagination or opinion.
Visit another property tax appeal session to become comfortable with the process and proceedings.
Don't forget to carefully prepare and practice the oral portion of the presentation. While a typical property owner is not expected to have the oratory skills of an experienced trial attorney, a well-prepared, convincing, confidently delivered argument, supported by hard facts should impress the reviewers.
Don't neglect to prepare a concise summary of the argument in writing. Most reviewers will not reread even the most convincing and well-written presentation. They will, however, read and appreciate a straightforward and brief summary, highlighting the strongest points of the argument.
References
Resources
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