Lowering Property Assessments: A Path to Reduced Taxes
As your home's property value is assessed based on market value, understanding how to appeal an assessment can help you reduce your property taxes. This guide will explore how and why property assessments change and provide practical steps for challenging an assessment.
Understanding Property Assessments
Your property is first assessed at market value, which is typically your purchase price. However, in subsequent years, the county assessor is responsible for determining the market value. If you believe the assessed value is higher than it should be, the assessment can be appealed.
Take note that the assessed value can fluctuate based on various economic factors. During my experience, I saw a property's assessed value decrease in 2020 due to the economic impact of Covid-19. The value then increased in subsequent assessments, reflecting changes in market conditions.
Challenging a Property Assessment
To effectively challenge a property assessment, you first need to understand the current market value of your property. This information is crucial as it represents what is realistically out there in the market. You can easily look up this information online or by requesting it from your local assessor's office.
My friend, the Mayor of a city, has often faced these challenges. He advises that if you want to argue against the assessment, you must first prove that the real value of your property is indeed lower than the assessed value. While it may seem logical to argue that the city should buy your home at this price, it is important to consider that doing so would be counterproductive. Most homeowners have reasonable doubts about accepting a low assessed value, as it reflects a negative economic trend in their neighborhood.
Before you engage in an appeal, ensure you have a solid argument. Proving that your neighborhood has depreciated significantly can be challenging, and you must present evidence that is convincing beyond a reasonable doubt. For example, if you live in an area that has experienced significant job loss, economic downturn, or higher crime rates, you can use these factors to support your case.
One effective strategy is to hire a lawyer to represent your case. My parents' neighborhood takes this approach annually. They enlist the help of a lawyer who charges them one-third of the savings achieved by the community. This arrangement incentivizes the lawyer to devote significant resources to the case, increasing the chances of a successful appeal. Once the lawyer intervenes, the county typically agrees to lower the property values to reflect the updated market conditions.
The Appeal Process
Once you decide to appeal, you can make an appointment with the county assessor to discuss your concerns. This step is crucial as it allows you to formally state your case and potentially challenge the assessment.
I remember one instance where I believed my home was overvalued. After conducting research and finding that the assessor had incorrect information about my property (they thought I had an extra bathroom that was not actually there), I made an appeal. The appeal process resulted in a win for me, but it required thorough evidence and preparation.
Another successful strategy is to appeal based on changes in the neighborhood. If your area has experienced significant economic downturns or property depreciation, you can use this as evidence to support your appeal. For instance, if you find information suggesting that your neighborhood's median home value has declined by a significant percentage over the past few years, this can be a strong argument.
Conclusion
Lowering your property assessment is a complex process, but it can lead to reduced property taxes. By understanding the factors that influence assessments and by following the proper appeal process, you can increase your chances of success. It is important to gather as much evidence as possible, such as market data, local economic reports, and any discrepancies in the assessor's records.
Remember, the goal is to prove that the current market value of your property is lower than the assessed value. With the right evidence and a strategic approach, you can make a compelling case for a lower assessment, potentially lowering your property taxes in the process.