Although 75% of property tax appeals are successful and save homeowners an average of $450, only 7% of homeowners appeal annually. Research indicates five primary reasons homeowners do not appeal:
The process seems overwhelming and they do not know how to appeal.
They do not think an appeal is likely to be successful.
They think their home's assessed value is below market value and there is no basis for appealing.
They do not understand they can appeal on unequal appraisal, (being assessed for more than similar properties).
They are busy and do not want to set aside time, given the presumption that "you can't fight city hall."
Consider an appeal for a $150,000 house where the value is reduced by 5%. This would reduce the assessed value by $7,500 and the property taxes by $225, based on a 3% tax rate. Since the typical appeal hearing takes less than an hour, these are meaningful savings for the time involved. Regularly appealing your property taxes will minimize the value, so you are assessed at the low end of the range. Most property tax appeals are resolved at the informal hearing, which is the first step in the process.
Minimizing taxes includes regularly appealing property taxes and considering options for income tax reduction. In some cases, tax planning needs to occur years in advance. For estate tax planning, it may be prudent to start decades in advance. Some tax reduction options can be performed after the fiscal year has ended, including a fixed asset audit, cost segregation study and abandonment study.
Minimizing taxes requires a modest investment of time. High-income taxpayers are often reluctant to divert time from production activities. However spending two to four hours with an advisor often reduces taxes by 20 - 50%. In some cases, it is possible to completely eliminate taxes for several years. This modest investment of time can substantially increase after-tax income.
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