Property Tax Appeals

Frequently Asked Property Tax Appeal Questions

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Market Value and House Tax Reduction

Frequent Questions about the Home Tax Assessment

More reasons to look into your property tax assessments.

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Why can't I just trust the tax assessor to make things right?

     Tax assessors are appointed politically and given an impossible job. They are understaffed and cannot find the time to cover their territory and also determine the property value in their jurisdiction accurately. When is the last time the tax assessor came to your home?

   The tax assessor's job description is to protect the aggregate tax base and he will very rarely go out of his way to give someone a break. His office maintains and stores data on each parcel it assesses. Even when he sees or knows of inequity, he/she will not rock the boat and create more work for himself. He is not Robin Hood!

     Isn't it curious that most people assume their property taxes are fair and accurate? But the fact remains, only you can be sure you are not being overcharged.


What is "assessed value" and how is my tax bill determined?

    Assessed value is price placed on land and buildings by a government tax assessor for use in levying property taxes. The assessed value of the property may be different than the appraised value. Appraised value or market value is rarely the same as assessed value.

     You don't need a detailed understanding of the whole process, but grasping a few facts will help. First, it is necessary for the taxing authority to know the amount of money (the budget) the local government will spend for one year. The local government provides income for regulatory and service departments, schools, police and fire departments, road maintenance, library, etc.

     The total budget is composed of these salaries and expenses along with bonded indebtedness (principal and interest payments on borrowed money that was voted for). This budget is then divided by the total dollar amount of all the assessed value of real estate in the tax district (provided by the assessor) to determine your tax rate. That tax rate when multiplied by your property value (assessed value determined by the tax assessor) equals your tax bill.

     In other words, the amount of taxes you pay is the result of the tax rate multiplied against your assessed value.


Why is my home tax assessment different than the price I could sell my house for?

     Your home value is the market value. The definition for market value is the most probable price that a property will sell for in a free market of buyers and sellers, free from constraining pressures or unusual situations. This value is found by obtaining a home appraisal.

   The assessing authorities use a fractional formula to determine what percentage of market value your house is worth. Usually they call this figure the sales ratio. This can be called, depending on the jurisdiction, the average ratio, assessment level, director's ratio, the common level of 100% of true value, RAR (residential assessment ratio) or the equalization rate (which may not always be equivalent to the sales ratio). If the sales ratio is 50% then a house that would sell for a market value of $200,000 would be assessed at $100,000.

Are my assessments reliable?

     First, we have to determine if you have a case at all, that is, if your home tax assessment is too high. The amount of your home tax assessment is what the town thinks your house and property are worth relative to other properties. This may or may not be an accurate figure. The National Taxpayers Union is credited as saying that as much as 60% of all property in America is over assessed.

     Recently appraised properties are more accurate and closer to the dollar amount of current value than properties that have not been appraised recently. In other words, a recent estimate is closer to reality than an old estimate. Many taxpayers have the impression that their assessment is fair if it is below the current fair market value. However, what we really are looking for is equability. The fact is that property should be valued equitably with similar type property within the same taxing jurisdiction. If a taxpayer's property is assessed at 95% of fair market value and, in the rest of the jurisdiction, similar properties are assessed at 75% of fair market value, what's fair about that?

     Most municipalities hire a company to do a "blanket assessment" since the tax assessor does not have the time to individually inspect each property. Part-timers, college students and, for the most part, nonprofessionals conduct the mass appraisal. Often old values are just rolled over without inspection. The time value allotted for each house inspection are minimal and mistakes are common. Because of a lean budget and/or negligence, distortion and error easily creep into the statistics. Any mistake on their part can cost you tens of thousands of dollars over time.


Why don't more people challenge their high property taxes?

Over 95% of people have no idea how to determine if they are being overcharged. The property taxing authorities do not want you to get curious about the value they place on your house and property. They do not have the time or manpower to establish accurate assessment figures and since less than one percent of the population appeal their taxes, why should they bother? Equalization or equal treatment is impossible and you have to check for overcharges yourself. One of the single, greatest savings at your disposal today is the potential savings on your property tax bill.

If my lender includes the property taxes in my mortgage payment and he overcharges me will I need a copy of my appraisal in order to challenge the over taxation through the Tax Assessor's office? Please advise!!!!

     Your mortgage lender uses the property tax information forwarded from the tax assessor's office. Your mortgage lender will have to readjust their figures if your property taxes are reduced. Your property taxes are in the public record.

     On the other hand, if you need to challenge your municipal property taxes, the real estate appraisal that your mortgage company has is outdated and of no avail. You need proof of valuation for the tax year you are challenging your taxes. This is a yearly date which the taxing authorities call the annual assessment date. This annual assessment date precedes your annual deadline filing date. The sale dates of the comparable properties you choose must precede this assessment date. If the annual assessment date is in October and your appeal is scheduled for August, you must have sales comparables dating before the October assessment date for the preceding year to be valid, otherwise your evidence will not be accepted.

Why does a home tax assessment change?

     For years, assessments rose in line with soaring house and property prices. Property prices later leveled off or began dropping when mortgage interest rates shot up. Now in the 1999-2001, mortgage rates are the lowest in decades, and prices are holding steady or edging up. Labor markets are tight and economic demand for housing is steady.

     Because of the changing housing market, assessments are changed every 6 to 12 years by most municipalities through use of a mass or blanket appraisal. Some municipalities forgo the mass appraisal and simply roll over old assessments.

     Unlike income taxes, where rules change from year to year, property tax calculations do not change and do involve the same methodology year after year. Appraising the value of your home is the basis for a house tax reduction. Purchase a book such as "Property Tax Appeals: How to Win Your Case" and apply the easy-to-learn principles and accepted appraisal practices.


How do I appeal my home tax assessment? Is it expensive? What do I have to prove?

     Contact the municipal authorities or the local tax assessor for printed material on how to challenge your taxes. The fees to appeal your property taxes are minimal. If you do it yourself with our book as a coach, you'll save yourself the cost of an attorney and an appraiser. All you have to prove is that the assessment is unreasonable, excessive or discriminatory.


Why can't I just get a real estate company to give me a figure of what my house is worth?

     Real estate professionals suffer from a bad reputation caused by a few bad agents and brokers. Real estate people often promised that they can get more money for your home than what a professional real estate appraiser says your house is worth just to get your business. And when it does not sell, they told some that the market was tight and that they had to lower their price. Or, another tactic of real estate unscrupulous agents is that they will hoodwink you and tell you that your house is worth less than it's true value and sell it immediately to someone in their "wings".

      Because of a few bad apples, real estate agents and brokers have this stigma and their word is not accepted as reliable by the authorities. This is why it is prudent to get independent council from a licensed appraiser or from doing your own market analysis. Our book makes that bottom-line market analysis possible and cost effective.


Can my taxes go up if I lose?

     Highly unlikely. I don't claim to have seen it all, but I've never seen or heard of it. If you have a case the burden of proof is on you, the appellant, to prove that the home tax assessment is in error. The system is not geared toward taking a vindictive stance if you lose. Maybe the system is vindictive in Iraq or China, but not here in the States, Australia, or England.

If I lose my property tax appeal, can I challenge again?

     If by chance you lose your case, you can take the case to the next higher level. If you lose at the higher level, you can challenge the property tax appeal again the following year at the municipal level but you'll have to use new evidence. You can keep at it until you get it right. With our book you'll eliminate guesswork and save yourself time and doubts.

    Food for thought: In a study of Rochester, NY (reported in 2001) these percentages were found:

     Only 2% of homeowners, according to this study conducted by the Lincoln Institute of Land Policy, carried their appeal beyond the local assessor. Those that took the case to the local assessor won an average reduction of 8%.

     Those that went further to the municipal tax court achieved an average reduction of 13% off their home tax assessment.

     Those that went the distance to the New Your Supreme Court had 37% of their home tax assessment rolled back.


House property taxes in my community are too high and out of control. What can we do?

     This is a political issue involving tax reform. You are not alone in your dismay over the lack of fairness and excesses of the property tax system. Effective information to appeal your property taxes is hard to come by. Without percentage caps on property taxes, politicians can promise tax cuts to get elected and may later raise taxes to new excesses to meet budget shortfalls. Getting involved in a state or local property tax reform group is probably the only way you can personally further a change. Here are a few battles that I've heard about lately:

= Nassau County, New York will finally reassess over 415,000 parcels of residential real estate by 2003 that have not been mass assessed since 1938. The current system is based on 1938 construction costs outdated by more than 60 years! Some get breaks while many pay an unequal higher share of taxes.

= There are towns in Virginia that have not been reassessed since 1949. Political pressure is building to be bring some reform and ensure better current home property tax equalization accountability.

= In Ontario Canada, property record card information, for up to 6 comparables, must be provided by the tax assessor if requested by the contesting property owner. Why is this service not provided by the tax assessing authorities in every town in the United States?

= In Alaska, legislation has been proposed limiting increases in assessments capped at 2% per year. More importantly, property taxes would be capped at 1% of assessed value forcing towns to stay within a budget limit.

= In Newark NJ tax reform legislation is proposed to change the fact that 23% of the property pays 100% of Newark's' tax burden. In other words, 77% of the property owned in Newark is property tax exempt!

= Montana enacted a law to cap property assessment increases at 2% annually for the next 50 years.

= California's landmark Proposition 13 in 1978 cut property taxes from 2.5% of market value to just 1% of market value. To put teeth into the law, it required a 2/3 legislative majority vote to increase state taxes. Pundits said California would plunge into financial doomsday. The opposite happened.


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Will this guide work in other countries and what about all the other state with their different laws? I am an affiliate with Clickbank who is considering targeting your product to a specific geographic area.  How can I convince people in this county that your product if effective there when laws and procedures vary from state to state, and from county to county?

The process is the same anywhere in the free-world. In Canada, Utah, New Zealand need to demonstrate to the authorities the actual value of your home is less than the value it was assessed for.
To do so you compare it to other homes and make adjustments for differences.
Kind of similar as you would if you were shopping for a used car. You'd compare similar models, same year built, make adjustments for differences in milage, dents ...
The only thing different from area to area is a difference in filing fees which is insignificant ... usually less than $50 and the sales ratio. The sales ratio can be call by different names varying by counties, states and countries. Nevertheless, the concept and resulting value is the missing part of the equation that equates assessed value to market value (assessed value divided by sales ration = market value). The assessing authorities use a fractional formula to determine what percentage of market value your house is worth. Usually they call this figure the sales ratio. This can be called, depending on the jurisdiction, the average ratio, assessment level, director's ratio, the common level of 100% of true value, RAR (residential assessment ratio) or the equalization rate (which may not always be equivalent to the sales ratio). If the sales ratio is 50% then a house that would sell for a market value of $200,000 would be assessed at $100,000.


"Tax reform is taking the taxes off things that have been taxed in the past and putting taxes on things that haven't been taxed before." - Art Buchwald, humorist

Links for further information on the politics of property taxes:

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     A shortcut to realize an effective property tax appeal employing time tested methods used by experts is found in an inexpensive step-by-step guide that shows you how to make all the adjustments you'll need to make your home comparable.

To locate ordering information for "Property Tax Appeals: How to Win Your Case" click here.



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