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How To File An Appeal On Your Property Taxes

When homeowners get their property value assessment from the local government this year, they might find themselves with sticker shock. Thanks to sale prices that have risen as much as 20 percent year-over-year, those estimates are likely to be much higher than they were the year before, leading to a spike in property taxes.

With prices changing so quickly, how do you know if your assessment is accurate? And if you’re sure the estimate is higher than what your home could actually sell for, is there anything you can do about it?

The assessment process…

In most cases your local government employs teams of assessors who periodically estimate your home’s value, and then sends that estimate to you in the mail. Many cities and counties assess all properties every year, while others do so only every other or every third year.

According to the D.C. government, which appraises property each year, an assessment is the estimated market value for your home, or the probable price for which you can sell your property under normal conditions. But if you aren’t selling the home, it’s how the District decides how much you’ll pay in property taxes for the year.

Though the assessment process varies from state to state and county to county, the basics generally remain the same.

Your property taxes are set in part by the millage rate, which represents the amount per every $1,000 of a property’s assessed value that owners pay. The other factor is, of course, how much the property is worth.

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If your home sold within the last year, that’s easy — it’s worth the sale price. If not, local assessors will estimate the value.

To do that, they usually rely on comparables, or the price that homes similar to yours sold for within the past year. This will take into account location, how many bedrooms and bathrooms the home has, and any other amenities it might include, such as a fenced-in yard or an accessory dwelling unit. If you’ve added a backyard shed or sunroom to the home in the last year, you’ll see that reflected in the estimate.

Assessors typically can’t visit every house in their city or county every year, so they also use oblique photography or geographic information systems (GIS) to fill in the gaps.

“As mass appraisers it’s very important to us that we keep on top of the current condition of properties and the current market,” said Greg McHenry, president of the International Association of Assessing Officers and head of the appraiser’s office in Riley County, Kan. “We look at open market sales and analyze them to determine the sales price per square foot.”

Because assessments are usually handled at the hyperlocal level, there is no national database of appraisal values. However, you can get that information from your local government by visiting its website.

Things are handled a little differently depending on where you live. One major exception to the rule is California, which bases property taxes on a home’s last sales price even if that sale took place decades ago.

Many homeowners see estimates online, such as Zillow’s “Zestimates,” for how much their homes are worth. McHenry said local appraisers can be much more accurate as they check homes against comparable local sales and physically visit properties.

If you are confident that your estimate is higher than what your home would actually sell for, you can make a case to the powers that be and, with enough data at your side, potentially get that estimate lowered and save some money at tax time. Here’s how:

Appealing your assessment…

First and foremost is making sure you file your appeal by the deadline. Maryland assesses property once every three years, and appeals must be sent within 45 days of receipt. In the District and in Fairfax County, Va., which appraise homes annually, appeals must be made by April 1.

And those deadlines are no joke!

How you can prevent buyer’s remorse…

“If you miss the deadline, you miss the deadline,” said Anslie Stokes Milligan, a Washington-area real estate agent with McEnearney Associates. “Broadly speaking, these governments are not looking for opportunities to give you additional time to appeal.”

Milligan said D.C. historically had appraisals well below market value, and has only started trying to bring them closer to fair market within the past five years or so. She has started getting calls from past clients complaining about their high appraisals. This year, she received dozens of calls after the notices went out.

She said most homeowners aren’t familiar with the appeal process or how it works.

In the District, homeowners can request comparable sales — a key data point in any assessment — and the worksheet the D.C. government used to estimate your home’s value.

Another key is to be realistic about what you argue the home is worth rather than simply shooting for the lowest number possible.

“More people would have success if they aimed for actual market value, rather than trying to get below that,” said Milligan.

How hard is it to file an appeal?

Kevin DeTurris, a Fairfax County attorney with the firm Blankingship and Keith, said that most home value appeals can be easily handled by the homeowner and that using attorneys is usually only needed for large commercial properties. By the same token, a successful appeal typically saves the homeowner just a few hundred dollars, so it’s not worth the cost of obtaining a full appraisal.

An exception applies to homeowners who have recently refinanced their home to take advantage of low interest rates. If the refinance involved a professional appraisal, and that appraisal says the home is worth less than what the government estimates, the appraisal can be used as evidence in an appeal.

Paying off your mortgage? The property taxes and homeowners insurance are now on you.

DeTurris advises finding recent sales of homes of similar size and quality to yours in the nearby area. If a house down the street sold for less than the estimate, you’ve got good grounds for an appeal. Even if a home sold for the same or more than your current home, if it was larger, had more bedrooms or bathrooms or other amenities than your home does, that can still be used to argue for a lower appraisal.

The best way to do this is to search through your local tax database online, then fill out a form to begin the appeal process.

“Each county has a tax database out there, so you can find what everybody is being assessed at and if you’re being treated fairly,” said DeTurris. “You can start hunting and pecking other homes in your area and what they’re assessed at. You can then make an argument to the board of equalization saying, ‘Here are my three neighbors, they’re assessed $100,000 less than me, please change my assessment.’ ”

DeTurris said finding three comparable properties that the city or county assessed at a lower value than yours is usually enough to make a convincing argument, provided you include documentation to back up your claim.

Appeals can also be made for errors in property description — for example if an assessment says your home has four bedrooms when it only has three.

“Use the exact assessors’ data against them,” said DeTurris. “Using concrete data that you can point to is probably the best path to take.”

McHenry stressed that assessors welcome the appeal process and are glad to have a check on their work.

“Assessors do not run from appeals,” he said. “The appeal process is another opportunity for us to make sure that we get it right and get those values as accurate as we possibly can. It’s not uncommon for someone to appeal a value and we find out that we overestimated the amount of finished basement or something like that. We don’t see interiors in a lot of cases. It’s an opportunity to make sure our data is accurate, and to update it if not.”

Other than the time involved, there’s little risk in filing an appeal. Your property tax assessment can go down if you win, but won’t go up if you lose.

“Homeowners know their property better than anyone else,” said DeTurris. “They know what it’s close to, they know what amenities it has, they know why they bought it. A property owner is the ideal person to advocate for the true value of their own property.”