How to Challenge and Reduce Your Property Taxes

Property taxes fund local public services such as schools, police, and fire departments, and the amount each homeowner contributes is based on their property’s value. Every property owner retains the right to ensure their tax liability is calculated fairly and accurately. Understanding the components of your tax bill is the first step, as it can reveal opportunities for a more equitable assessment and potential reductions.

Understanding Your Property Tax Assessment

A property tax bill results from a specific calculation. The process begins when a local government official, the assessor, determines the fair market value of your property. This figure is the estimated price your home would sell for in an open market. This is different from the “assessed value,” which is the value used for tax purposes and is often a percentage of the market value.

Many jurisdictions apply an “assessment ratio” to the market value to arrive at the assessed value. For instance, if your home’s market value is $400,000 and the local assessment ratio is 50%, your property’s assessed value would be $200,000. This assessed value is the figure upon which your tax is calculated and is not the same as an appraised value for a mortgage.

The final component is the “tax rate,” expressed as a “millage rate” or “mills.” One mill represents $1 of tax for every $1,000 of assessed value, and the rate is set by local governments to fund their budgets. The formula for your tax bill is: Assessed Value x (Millage Rate / 1000) = Property Tax Bill. While you cannot change the tax rate, the variable you can influence is the assessed value.

Identifying Potential Reductions Through Exemptions

Before appealing your property’s value, investigate tax exemptions for which you may be eligible. These are legal provisions that can reduce your tax bill by lowering your property’s taxable value. Exemptions are based on specific qualifications related to the homeowner or the property’s use, and they must be applied for.

One of the most common is the homestead exemption, available to homeowners who use their property as their primary residence. This exemption works by subtracting a flat amount or a percentage from the assessed value before taxes are calculated. An exemption could reduce a property’s taxable value by $5,000 to over $50,000, depending on the jurisdiction. Investment properties and vacation homes are not eligible for this benefit.

Many communities also provide exemptions for senior citizens, often requiring the homeowner to meet an age threshold, such as 65, and fall within certain income limits. Exemptions are also frequently available for individuals with disabilities and for military veterans, where the benefit might be tied to the level of service-connected disability.

Each of these programs has distinct eligibility criteria and application procedures. You should consult your local government’s website or contact the assessor directly to get a definitive list of available exemptions, the necessary forms, and the filing deadlines.

Information and Evidence for an Assessment Appeal

A successful challenge to your property’s assessed value depends on preparation and evidence. The process begins with gathering the information needed to build a case that your property’s value is inaccurate or inequitable compared to similar properties.

Review Your Property Record Card

The first step is to obtain and review your property record card from the local assessor’s office or its website. This document contains the details the assessor used to determine your property’s value, such as lot size, square footage, number of bedrooms, and other features. Check this card for any factual errors, as a mistake can lead to an inflated assessment. An incorrect listing of four bedrooms in a three-bedroom house is an error an assessor can often correct without a formal hearing.

Gather Comparable Properties (“Comps”)

Most assessment appeals require identifying comparable properties, or “comps.” These are homes that are very similar to your own and have recently sold for less than your property’s estimated market value. A strong comparable property is located in your neighborhood and is similar in style, size, age, and condition.

You should aim to find at least three to five such properties. This sales data can be found through public county records, real estate websites, or by consulting a local real estate agent. If the assessments on these comparable properties are lower than yours, you can build a case that your property is over-assessed.

Document Property Condition

Your property’s physical condition impacts its market value. If your home has issues that would deter a buyer or require costly repairs, this should be part of your evidence. Problems that can reduce a home’s worth include:

• A leaking roof
• A cracked foundation
• Widespread mold
• An outdated electrical system

Document these issues with clear, dated photographs. For major problems, obtaining written repair estimates from qualified contractors can provide quantifiable evidence of diminished value.

The Formal Property Tax Appeal Process

Once you have gathered your evidence demonstrating an overvaluation, you can proceed with the formal appeal. This stage is procedural and requires strict adherence to local rules and deadlines. Missing a deadline can forfeit your right to appeal for that tax year.

Initiating the Appeal

The first action is to identify the correct local body that hears initial appeals, often called a Board of Review or Assessment Appeals Board. You must then locate the official appeal form, available on the county or municipal assessor’s website. This form must be filled out completely and submitted before the filing deadline, usually set 30 to 60 days after assessment notices are mailed.

Submitting the Appeal

Your appeal submission should be a package containing the completed form and all the evidence you have prepared. This includes a copy of your property record card with errors highlighted, data on your comparable properties, and photographic evidence and repair estimates for property defects. Organize this information clearly. Jurisdictions may allow for online submission, mail, or in-person delivery.

Post-Submission Stages

After your appeal is filed, it will undergo an initial review by the assessor’s office. This can lead to an informal discussion or a settlement offer if your evidence points to a clear error. If you and the assessor cannot reach an agreement, the next step is a formal hearing before the appeals board.

At the hearing, you will have time to present your case and evidence, and the assessor’s office will present its justification for the valuation. The board will then make a decision. Should the local board’s decision be unsatisfactory, there are further levels of appeal, which may include a state-level board or the court system.