Challenge High Property Tax and Win

Good news for Americans facing eye-popping property taxes: You can fight city hall, or whichever government body sends you this annual economic albatross.

When real estate boomed, property taxes often followed suit. So why aren't they dropping now? First, local governments may go for years between re-assessments, so lower values may be overlooked. Also, a blanket reduction in assessments would mean less revenue for local governments at a time when most are strapped for cash.

The National Taxpayers Union estimated earlier this year that up to 60% of the country's real estate is assessed too high. Here's how to make sure you don't pay too much.

Know Where to Go

While getting your property taxes lowered is neither easy nor automatic, countless homeowners have swayed their assessor to lighten the load. However, success is up to you. Tax assessment varies across the country. So, start by learning exactly how your tax is totaled.

Next, it's critical to closely review your bill for any obvious mistakes. It should show your assessment and taxes from last year and this year. If you find an error or feel you're being overbilled, you have a couple of options. One is to go directly to the assessor's office; you can probably go without an appointment. If you're lucky, you may get a reduction right away. Or, you may be told you have to file a petition for a hearing before a magistrate. Before you go to a hearing, roll up your sleeves, do some research and perhaps even hire professional help.

Know your Property Specs

One of the first things to do is to make sure the government has the right specifications for your property. These include confirming things such as the square footage under roof and the lot size. They're not always accurate, says Michael Mila, a Chicago-area real estate appraiser who owns Chicago Appraisals LLC and operates the website Often, the assessor may have simply looked at the outside of your house before rendering judgment.

"One of my clients had a one-story home with vaulted ceilings," Mila says. "They assumed the height reflected two stories, so they charged her for double the living space. She brought the sketch to the assessor's office and wound up saving $1,000."

You should have received a floor plan and boundary survey when you bought your house. Use them to determine your dimensions. A surveyor or engineer can help you here, but the cost will be $200 to $1,000, depending on the size of the property.

Locate the Problem

You've heard it before: The three most important factors in real estate are location, location, location. So one way to prove you're paying too much in taxes is to demonstrate what's wrong with yours. When factors outside the property's boundary bring down its value, this is called external obsolescence by tax assessors.

If you're so close to a runway that pilots wave to you, or your backyard has a crossing signal thanks to the train tracks on your lot line, make the case that you have external obsolescence.

But what if the rest of the neighborhood has the same issue -- say, a nearby town dump that doesn't pass the sniff test -- and roughly the same assessment? Make the case that your situation is worse. Maybe your house is next to the noisy public playground or adjacent to a parking lot for local school buses.

"You need to let the assessor know 'I'm not like the rest,' and 'My location is inferior to others around me,'" says Mila.

His suggestion: Pretend you're a buyer looking for an excuse to lowball a bid on your home.

Give Dysfunction a Function

Is your house haunted by a bad layout? Good news: That may mean lower property taxes.

Quirks inside the home are called "functional obsolescence," says Steven Housman, president of Property Tax Experts Inc., a property tax consultant firm in Hollywood, Fla. A simple definition of functional obsolescence is: homes with features that are neither practical nor desirable. For instance, do you have to walk through a closet to get to a bedroom? Does your four-bedroom house have a one-car garage?

Functional obsolescence will make your home less fun to live in and therefore, less valuable when it's time to sell. But the upshot is that these quirks may increase your odds when challenging your property assessment.

Keep up With the Neighbors

Did you buy your home when prices were at record highs? Did you get re-assessed right before the property bubble burst? Then your taxes might also be inflated, particularly compared to your neighbors' rates. Research online what everyone on the block is paying, and see whether your bill is in line with the comparable properties, says Mila. Check for the taxes on similar houses that have recently sold.

If the compared tax prices are off kilter, print out your research and go to the assessor's office with the evidence. "If you're higher than the norm, something is wrong," says Mila. He says the No. 1 reason challenges get rejected is homeowners don't have their documents in order.

Hire an Appraiser

We all feel we should be paying less property tax, but obviously we have our own interest at stake. You need to demonstrate the objectivity of your opinion. And for that, it's best to hire an appraiser. An appraiser is different from a surveyor. The appraiser's role is to estimate the value of the property. Don't rely on free services from online companies that purport to give market values in your area. Assessors have been known to throw them in the trash. The assessed value should be roughly equal to the appraised value. A third-party opinion bolsters your credibility, says Housman.

Appraisers are state-certified and in most areas, they have professional associations you can contact for referrals. The cost is $300 and above. Some homeowners go an extra step and hire an attorney, but before doing so you should balance the legal fees you'll incur against any taxes you'll save.