How to Appeal a Property Tax Evaluation

As property tax bills start arriving in mailboxes, many homeowners might be surprised to find their assessed evaluation is higher than they anticipated.

According to the National Taxpayers Union, between 30 and 60% of taxable property in the U.S. is over-assessed. What’s more, middle- and lower-income taxpayers’ properties are among the most often over-assessed, yet fewer than 5% of taxpayers challenge their assessments.

Although assessment procedures and requirements vary by state, property tax is calculated by multiplying the assessed evaluation amount and the millage rate, or the tax rate on assessed value determined by local government.

A notice of assessment is then mailed to the taxpayer stating the current value of the property as determined by the county assessor. If homeowners feel that they’re being unfairly taxed based on comparable homes in the area, they should start by contacting the county assessor’s office, says Richard Borges, president of the Appraisal Institute.

“However, don’t assume that the assessor is out to get the property owner,” he says. “Assessors are charged with establishing equity in assessment unless the jurisdiction has some other type of regulatory or legislative control of the assessment process.”

When to Initiate an Appeal

Homeowners may want to consider initiating an appeal if their state’s jurisdiction is based on market value and their particular property’s value has decreased significantly below the assessed value on their tax bill, recommends Borges.

“Aside from inaccuracies, the best chance a consumer has of winning an appeal is to show a lack of consistency between their home’s value and other comparable homes in the neighborhood,” he says.

A discrepancy usually comes to light after an appraisal or when the property is refinanced or sold, says Evans Hale, property tax consultant at Campbell & Brannon Property Tax Services LLC.

“The appraisal value and/or the sales price in either case is compared to the county's value and this will give a good indication if the value is fair,” he says.

A current homeowner with intentions to sell the property may want to challenge the assessed value if they feel it is too high and could scare away prospective buyers.

“Proactively as the current homeowner, I’m not being taxed at that assessed value but I’m trying to lower that assessed value to make it a more attractive home to buy from someone who would then be taxed at that assessment after the transaction closed,” says attorney Dan Penning.

For homeowners considering making an appeal, here’s how to do it:

Step 1: Weigh the Costs

Fees can vary by region, but homeowners can expect to pay anywhere from $300 to $750 for an appeal based on the type and complexity of the project, the market, and the appraiser’s experience level, according to Borges.

“This fee does not include expert witness testimony, although that is an additional service the appraiser can provide,” he says.

There will be additional filing fees if the appeal goes to the superior court, adding up to a few hundred dollars depending on the jurisdiction plus attorney fees.

It’s essential to weigh out the estimated cost of the entire appeal process (independent appraisal, court and attorney fees) in comparison to the difference in tax value the homeowner hopes to appeal, says Penning.

“If the tax savings are not more than $2,500 in the first two years cumulatively, they might want to think about if they really want to do that because even if they win, the expense of appealing it might just eat up those tax savings for much of the foreseeable future.”

Step 2: Hire an Independent Appraiser

Homeowners can improve their chances of appealing their property tax assessment by hiring a certified independent appraiser. Having a real estate agent cite comparable sales in the area or market analysis won’t cut it, says Penning.

“[Independent appraisers] usually get three or four comparable properties and adjust them plus or minus because one property might have a little more square footage in the house than another…so that you’re comparing apples to apples and that’s why that appraisal is so important,” he says.

Having a third -party expert to provide credible, reliable opinions of the home’s value can help when it’s time to present the appraisal report to the local assessor.

“Many appraisers collaborate with property tax consultants and attorneys who specialize in tax appeal matters, which could provide the best opportunity for a property owner to increase the chances of a successful tax appeal,” Borges says.

Step 3: Comply with all State Laws, Deadlines, and Procedures

It’s important to contact local taxing authorities in advance of the deadline for appeals, and be prepared to present all documentation necessary.  Be aware that the time frame to appeal is usually brief, anywhere from 15 to 45 days from the assessment date.

“If you don’t appear at the local level, you are out of luck from appealing it any further,” says Penning. “You’ve got to pay attention because if you miss the deadline, you’re out of luck for that year.”

Understanding and following procedures and protocols specific to a homeowner’s state or municipality can make or break an appeal and presenting incorrect information will not likely result in a reduction, explains Hale.

“An appeal can take a long time from start to finish but you may only get a few weeks’ notice for your hearing date so don't procrastinate on your homework.”