Property Tax Appeal: 7 Things (2023) You Must Know

There is no escaping property taxes, but, fortunately, there is always a property tax appeal process.

If you choose to purchase property, you’ll need to factor in how much the local government will charge you as a homeowner.

If you ask any property owner, they’ll likely tell you this amount is too much.

Fortunately, there’s a process known as a property tax appeal that can help you lower your tax bill.

Here’s what you need to know about property taxes and how a property tax appeal can help reduce the burden you feel!

1. How are property taxes calculated?

Property taxes are calculated ad valorem, or according to the value of your property.

To find out how much your property taxes will be, take the mill levy and multiply it by the assessed value of the owner’s property.

2. What is the revenue from property taxes used for?

Property tax revenue is normally used to fund local projects and services, like fire departments, law enforcement, local public recreation, and education.

All property owners benefit from these services, but it can still be difficult to find the means to cover property taxes, especially when they rise over time.

3. Can you pay off property taxes?

No, unlike a mortgage, property taxes cannot be paid off.

The tax bills will continue to come even after you own your home outright.

While some states have lower property tax rates than others, you can never escape these taxes entirely.

There’s always some form of property tax that a property owner must pay for municipal services around their home.

4. What are some tips you can use to lower your property tax bill?

bulletUnderstand how property taxes are calculated

Most people feel like they’re paying an exorbitant amount of taxes, but they don’t take the time to sit down and understand how the government reaches that number.

Often, the reason for this is that taxes are confusing.

Not only is there math involved, but the person in the next town over from you may pay a dramatically different amount.

Here’s the short version of how it works.

The local government hires an assessor to estimate the market value of your property, including the land and structures.

After this, you receive an assessment.

In some jurisdictions, the assessed value of the property is a percentage of the market value, and in others, the assessed value is the same as the market value.

Not all assessors complete their work the same way.

Some assessors may need to come to the property while others will use software to complete property assessments.

After this, your local tax collector’s office will send you a property tax bill based on the results of this assessment.

But how do they come up with that bill?

Your tax office will multiply your county or city’s tax rate by the assessed value that the assessor came up with.

For example, if your property is assessed at $300,000 and your government’s tax rate is 2.5 percent, then your annual tax bill will be $7,500.

bulletReview your tax card

A tax card provides the property owner with the information that the town has gathered about their property over time.

As a homeowner, you’re able to go down to your town hall and request a copy of this tax card from your local assessor’s office.

Why do you need this card?

It contains the following information:

  1. The size of the lot
  2. Precise dimensions of the rooms
  3. The number and type of fixtures located within the home
  4. Notations about improvements or special features on the property

Review this card and note any discrepancies.

You should raise these with the tax assessor so they can make a correction or conduct a re-evaluation.

Mistakes are common on tax cards, and if you can find them, then your township likely must correct them so you’re paying the correct property taxes.

bulletDon’t renovate before an assessment

When you make structural changes or improvements to your home (i.e., a new deck, pool, large shed, etc.), this will increase your tax bill because it increases the value of your home.

Before you begin construction, you should research how much the addition will add to your tax bill.

You can call the local building and tax departments to get an estimate.

We also recommend avoiding renovation right before an assessment to help you save some money.

Additionally, your curb appeal can raise your property’s assessed value.

If your house is physically more appealing from the exterior, chances are that you’ll be designated a higher assessed value, which means you pay more in taxes.

bulletGive the assessor a chance to walk through your home during the assessment

If a tax assessor shows up on your property, don’t let them walk it alone!

In many cases, assessors will only see the best parts of a home, like a new fireplace or granite countertops.

When you walk it with them, you can point out the parts of your home that would lower its value, like cracks in the ceiling or outdated appliances.

It sounds weird to most homeowners, but it’s the exact opposite process than you’d take if you were trying to sell your home.

Furthermore, while you’re under no obligation to allow a tax assessor into your home’s interior, this doesn’t normally work in your favor.

The assessor will typically assume that you’ve made improvements that you don’t want to show them, and this can result in a higher tax bill.

Towns often have a policy that homeowners who don’t grant full access to a property will have their homes assessed at the highest value possible for that type of property.

While this isn’t necessarily fair, disputing this with your township is often difficult if not impossible.

It’s better to grant access to the interior for a fair evaluation.

bulletLook for local and state exemptions

Certain states grant exemptions for homeowners in certain categories.

This can lower the tax burden for seniors, veterans, people with disabilities, agricultural properties, and homesteads.

Reach out to your taxing authority to see if you qualify for an exemption.

bulletFile a property tax appeal

If you’ve done all the above and are still struggling with your property tax burden, there’s still another option.

You can file a tax appeal.

A tax appeal requires a small filing fee (paid to the person who reviews your appeal).

You may also want the help of a lawyer (who will also require payment), but this is optional.

You must file your tax appeal promptly; otherwise, you’ll need to pay the bill you received from your local tax office.

In the next section, we’ll go over all the steps to filing a property tax appeal.

5. What are the steps for filing an appeal?

Below, we’ve included the steps for filing an appeal.

However, before you dive in, make sure you do your research.

Look at local real estate sales for comparable homes in your area.

You want to get a sense of whether your assessment is aligned with market conditions.

If you’re seeing that the new assessed value of your home is higher than what comparable properties have sold for, then you should consider the property tax appeal process.

bulletStep #1: Find the deadline 

You can’t submit a property tax appeal whenever you want.

Every town, county, and city has a deadline that you have to meet.

Otherwise, you’re out of luck.

For the most part, you can find information about how and when to appeal the assessment paperwork you’ve received.

You should submit an appeal as soon as possible.

Some municipalities only give property owners a few weeks to act.

For example, Cook County, IL permits 30 days while Fulton County, GA allows 45.

Either way, the window is normally brief, so don’t dawdle!

It may also be worth reaching out to your local tax office informally to see if you can resolve the difference without filing a formal appeal.

If the appeal cannot be settled informally, then you should move forward with the formal appeals process.

bulletStep #2: Decide if the savings are worth the appeal

Filing a property tax appeal can be expensive.

You’ll have to pay filing fees, hire an appraiser, and dedicate your time to this process which can take months.

Ask yourself whether the potential savings are worth the appeal.

In some states, it absolutely can be, but it’s worth considering before you enter into the process.

bulletStep #3: Get a third-party assessment

Get a third-party assessment of your home’s value.

This can help you prove that your current assessment is unfair.

A former tax assessor, realtor, or professional appraiser can help with this process.

bulletStep #4: Contact the assessor’s office

Property owners are entitled to know how the assessor arrived at their valuation.

Most assessors are happy to discuss this valuation via phone.

If you go through this process and are still unsatisfied, you should continue with the formal property tax appeal process.

bulletStep #5: Start the appeal process.

Start your appeal process with your local assessor or appeals board.

Here’s what the process normally looks like for a property owner, although, it can vary depending on your location, so make sure you do research in advance.

  1. The homeowner pays a filing fee and files a formal appeal
  2. The homeowner fills out paperwork and provides supporting evidence and documentation as to why your assessment appeal is valid
  3. The local county board or assessor reviews the appeal

While homeowners have only weeks to submit this, the board or assessor can take several months or even a year to decide.

bulletStep #6: Stick to the facts

When you’re called in to make your property tax appeal, sometimes you’ll have as little as 15 minutes.

This is not the time to whine about how much taxes are or to target the assessor’s office for not doing their job correctly.

Keep your emotions out of it and stick to the facts.

When you approach the matter professionally, the outcome is much more likely to be in your favor.

bullet Step #7: Receive your appealed decision

See if the board or assessor approves your property tax appeal.

If they do, this will not lower your tax rate (as everyone pays the same rate in your district).

Instead, it means they agree to decrease the assessed value of your home, which means you’ll pay less in property taxes annually.

Before you begin this process, you should also note that your assessment could increase.

There’s always the risk of the appeal not going in your favor.

You could be denied entirely, or you could receive an increase in your property taxes.

There have been property owners who have sought an appeal and have had their property taxes increased.

While this is uncommon, it does happen, especially if renovations were made after the original assessment, or if there were interior improvements that the assessor didn’t know about initially.

6. What are the 10 best states for property taxes?

Are you trying to decide where to move?

Property taxes can be burdensome to homeowners, and unlike a mortgage, they will never go away.

If you want to ensure that your tax bill doesn’t rival your mortgage, here are some states you should consider.

Note that all tax rates are taken from tax-rates.org.

bulletLouisiana

As of 2022, the effective property tax rate was 0.18 percent.

Louisiana has a low effective property tax rate and typical home values well below the national average, which makes it an appealing place to live!

bulletHawaii

As of 2022, the effective property tax rate was 0.26 percent.

This gives Hawaii one of the lowest effective property rates in the country.

However, that doesn’t mean you should pack up your things and head to the beach.

Of all the states on this list, it also has the highest typical home value.

bulletAlabama

As of 2022, the effective property tax rate was 0.33 percent.

While Hawaii ranks ahead of Alabama in terms of tax rate, those living in Alabama are much more likely to pay less given the lower average home price.

bulletDelaware

As of 2022, the effective property tax rate was 0.43 percent.

bulletWest Virginia

As of 2022, the effective property tax rate was 0.49 percent.

bulletSouth Carolina

As of 2022, the effective property tax rate was 0.50 percent.

bulletArkansas

As of 2022, the effective property tax rate was 0.52 percent.

bulletMississippi

As of 2022, the effective property tax rate was 0.52 percent.

bulletNew Mexico

As of 2022, the effective property tax rate was 0.55 percent.

bulletWyoming

As of 2022, the effective property tax rate was 0.58 percent.

bulletUtah

As of 2022, the effective property tax rate was 0.60 percent.

7. Which states have the highest property taxes?

If your state wasn’t listed above, then you may wonder if you’re in a state with some of the highest property taxes.

Here are the top 10 states with the highest property tax rates.

bulletNew Jersey – 1.89%

bulletNew Hampshire – 1.86%

bulletTexas – 1.81%

bulletNebraska – 1.76%

bulletWisconsin – 1.76%

bulletIllinois – 1.73%

bulletConnecticut – 1.63%

bulletMichigan – 1.62%

bulletVermont – 1.59%

bulletNorth Dakota – 1.42%

Final Thoughts

The thought of paying property taxes until you die isn’t a fun thought for any homeowner.

If you think you may have received an unfair assessment, consider a property tax appeal.

Additional Resources

If you are looking to buy affordable land, you can check out our Listings page. one-dollar-buy-landAnd before you buy land, make sure you check out Gokce Land Due Diligence Program. gokce-land-due-diligence-program-banner If you are looking to sell land, visit our page on how to Sell Your Land.

Would you like to receive an email with our latest blog/properties every Thursday?

 

Subscribe Now

 
I hope you enjoy reading this post. If you are interested in buying or selling land, check out:
Erika Gokce Capital
I hope you enjoy reading this post. Don't forget to check out my new book: Land Investing Mistakes -Erika

Disclaimer: we are not lawyers, accountants or financial advisors and the information in this article is for informational purposes only. This article is based on our own research and experience and we do our best to keep it accurate and up-to-date, but it may contain errors. Please be sure to consult a legal or financial professional before making any investment decisions.

Leave a Comment