The Real Estate Investor’s Resource

Turning Intentions into Action

Property Taxes too High? Here’s how to appeal…

Property Taxes Too High?

Property Tax Assessment Appeals to the Rescue

Are you watching your property taxes go up while your property value goes down?  Somehow it seems that even though property values are dropping, the taxes on property are still going up.  If this is the case for you, then exercise your right to the appeals process; it’s a fairly simple process.

First, you want to compare the tax assessed value of your property to the fair market real estate value.  Carefully check your property tax bill for the tax assessed value.  Then find the fair market value for your property by looking at recent comparable sales.  Real estate agents and websites such as www.homegain.com are good for performing a real estate fair market value analysis.

Let’s say that your property is 3 bedrooms and 2 bathrooms and is assessed at $155,000.00.  You want to look for recent sales in your area of other 3 bedroom/2 bath properties.   An example of the comparables sales in your area might be:

3/2   $138K

3/2   $140K

3/2   $157K

3/2   $165K

How would you make sense of these numbers?  If you just took the average of the numbers it would equal $150K.  

So, what do you do now?  Further define the differences in your property and the other comparable sales.  One way to do this is to use data from a real estate agent and website like www.homegain.com.   Another way is to simply drive by the address of each comparable property (this shouldn’t take much time since they are right in your neighborhood).   When you view the comparable properties, look to see how similar or different they are from your property.   You might find that the properties selling for the higher end prices of $157K and $165K are brick, while your home and those sold at $138K and $140K have siding.  Or you might find that the more expensive properties are larger than yours or have other differences that would make them worth more.  Whatever the situation, it is a good idea to take a picture while you are there to show the differences.

If you’ve found some substantial differences, it’s time to submit your real estate tax appeal.  There is a deadline for the appeals process so pay attention to the deadline dates on your tax bill.  Simply write a letter including your parcel identification number explaining why you are appealing the tax assessed value.  Include your comparable sales documentation, pictures and other documentation. 

You will receive one of two responses to your appeal letter.   Your tax assessed value may be adjusted based on your appeal letter.   However, you won’t always win the real estate tax appeal process that easily; your response letter may be a notice that you are required to go before the board of equalization to further dispute the tax assessed value.  At this point, you have to decide if it is worth your time based on the potential savings.

Don’t forget that the tax assessed value not only affects your bottom line, but if you get ready to sell your house, the buyer will have to consider the tax bill as part of their expense.  The tax amount on the property will impact their monthly mortgage payment, which impacts the amount they can pay for a house.  The simple fact that you have appealed your tax value and that it is in line with the fair market real estate value for your property can save you money now and be a help when you are ready sell. 

To learn more about real estate fair market value analysis, visit http://dealsorduds.com .

Advertisements

March 19, 2008 - Posted by | Real Estate, Real Estate Investing, real estate investors | ,

No comments yet.

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: