Most property owners are not aware if they are being overcharged on their real estate property taxes. Maybe the government likes being in the position of you not knowing. Learning the skills and knowledge needed to bring a solid case for your property tax appeal takes time and effort.
Your Tax Assessor does not want you to begin asking questions about the value they place on your real estate and property. This will create extra work for them. The Tax Assessor does not want you to appeal your assessment value. According to statistics, less than one percent of tax payers appeal their taxes either because they do not know they can, or if they know, they do not know how to begin the tax appeal process.
Tax authorities utilize mass appraisal techniques. The mass appraisal system leads to not enough time and money to acquire accurate assessment values. Mistakes become very common due to man power shortages versus the number of tax parcels that require reviewing, as well as the obvious time constraints and deadlines and even data entry after the figures and assessments are obtained. To be successful in overcoming the Tax Assessor value, you must gather all the information and initiate your tax appeal.
The National Taxpayers Union, an advocacy group interested in lowering taxes, maintains that as much as 60% of taxable property in the United States may be over assessed. This means that more than half of all property owners are paying more than their fair share of real estate taxes. It is estimated that only one in fifty homeowners challenge their assessments.
Most people with mortgages have their taxes automatically escrowed and are less likely to question and appeal their taxes. The most prominent homeowner profile that challenges the assessments are older home owners who have paid off their mortgage or people who are building a home. The vast majority of homeowners never attempt to appeal their property taxes and pay more than their fair share of real estate taxes.
If you do not question and scrutinize your assessment and take it at face value, chances are you are making a huge mistake. You may be losing money every year that could amount to hundreds or even thousands of dollars. To appeal your property assessment, you will need to do some extensive research before bringing your case to the review board. If you do your homework and properly prepare yourself, you are likely to overcome the over assessment. Every state has its own laws regarding property taxes, the counties or townships in charge of levying the tax have a lot of latitude in determining the appraisal methodology and the manner of how your property is viewed. Most local taxing jurisdictions conduct assessments that leave a high margin of error.
How property is valued for tax purposes varies from one jurisdiction to the next. Some will base your assessed value on a fraction of your market value. Others may use a cost approach to determine how much it would cost to build a home like yours. Never assume that your assessed value is correct, even if it is significantly less than what the house is actually worth.
There is a very narrow window of opportunity, in which to file an appeal. Some jurisdictions set aside a time every year to hear appeals. Other states or counties will only consider filing appeals for a few months after your house has been reassessed, which may not be every year. If you are considering appealing the assessment, you need to find out how much time you have to prepare your case. Do not wait or procrastinate, otherwise your appeal rights will expire.
Alan Trauger is a Real Estate and Building Consultant for residential and commercial properties. Mr. Trauger has attained over 35 years of diversified experience and knowledge in construction, finance, and real estate. He has been involved in various facets of asset management, acquisitions, real estate work outs, property management, construction, inspection analysis, development, sales, leasing, and Ad Valorem tax appeal for over 25,000 single family and multi-family units and over 2.5 million square feet of commercial buildings. A Court Appointed Receiver and Expert Witness. An experienced and knowledgeable problem solver, understanding processes, and issues related construction and real estate.
Mr. Traugerís wide spectrum of experiences, education, research, teaching, and publication of previous articles, commercial real estate market sales comparables, and textbooks enables him to assist property owners through the property assessment and tax appeal process.