How Do You Challenge The Tax Appraisal Value Of A Home Due To Declining Values?
A declining market in real estate is rarely good news. However, the city you live in might not be quick to follow the trends. On top of dealing with the reduction of the equity on your home, you could be facing property taxes that are too high for the actual value of your home.
Market value – what you would pay if you were to buy your home today on the open market – and assessed value – the value the town put on your home to calculate the property taxes – are not the same. However, the assessed value is based on the market value. It is recalculated periodically by the town assessor.
Property taxes are, in most cases, the second largest expense for homeowners after their mortgage and appealing the assessed value of your home could save you a significant amount of money each year. If you are convinced that the tax appraisal value is too high, here is our guide to challenging it.
1. Figure out the procedure to follow on your town’s website
Your town should inform you by mail every year of the assessed value of your home. This letter should also notify you of the date you can challenge the tax appraisal value by (it usually falls within 30 days), and the procedure to follow if you were to do so, which is often located in the back of the letter. Once you are aware of the assessed value, time is of the essence to challenge it successfully.
The town should also have forms available for you to contest the appraisal value, either on their website or at the tax assessor’s office.
Every town’s procedure to establish the tax appraisal value of a property is different. However, many use an equalization factor which accounts for market conditions, etc.
2. Find comparables to support your claim.
You must be able to support your statement that your house is worth significantly less than what it is assessed for. If you have any doubt on the subject, proceed with caution as the assessor can also choose to increase the value of your home.
In order to present a solid case, you should be able to produce three to five houses comparable to yours in terms of size, features (bathrooms and bedrooms), location, age, etc. Zillow is a solid starting point, but if you are feeling unsure, you can also call the professionals.
Real estate agents often offer CMAs for free as a marketing tool. Real estate appraisers are professionals who will help you present a solid case, but their services are more expensive.
3. Present your case
Again, the procedure and timeline depend from town to town, so refer to your local tax assessment ‘s office. It can be a lengthy process, so arm yourself with patience. The assessor may ask to inspect your home. In this case, make sure that you are in the clear in terms of permits and town authorizations.
If you still disagree with the town after they give you their decision, you can choose to appeal in front of the Board of Commissioners, who will rend a final decision.