In order to determine how much property tax you owe, the government assesses the value of your property and multiplies that by the relevant property tax rate.
Of course it cannot do this perfectly. Not necessarily because there’s something inherently inefficient about government (maybe there is, maybe there isn’t-let’s not get into that political argument), but because human beings in general are imperfect and there is always the potential for mistakes and differing interpretations.
What this means is the assessment for your property will not necessarily be dead on. It might be, but it also might erroneously high, it might be erroneously low, or it might be in a gray area where one can at least make a reasonable case that it’s a little high or a little low.
In a sense, the property tax appeals process gives you the property owner a distinct advantage here. Because whenever the assessment is dead on, or arguably a bit low, or clearly erroneously low, then there’s no challenge to it and that’s where it stays. Whereas if it is arguably a bit high, or clearly erroneously high, you can challenge it through an appeal and potentially bring it down. So the existence of an appeals process will either help you or have no effect in a given case; it cannot hurt you.
So then the question becomes, when is it worth your time and effort to appeal your property tax assessment? Under what circumstances would you have a good chance of establishing that the current assessment is too high relative to the actual value of your property?
The first thing to consider is whether property values in your area have been falling significantly in recent years. One of the main factors the government looks at in assessing the value of your property is the sale price of similar properties in recent years, usually the last three years. Well, if the real estate market has been crashing, what your home is worth today might be a bit less than what similar homes sold for last year, and substantially less than what they sold for two or three years ago. So this would be a point you’d want to bring up in an appeal, that the market circumstances require adjusting the assessment further downward from the sale price average of comparable properties in recent years.
Another approach would be to do some research of your own on what similar properties have sold for in recent years. Maybe you were unlucky in what properties the original assessment happened to look at in making its comparisons. Perhaps there are plenty of homes like yours that sold for $300,000-$320,000, and the assessors happened to use those in pegging the value of your house at $310,000, but it turns out there are others you come across that sold for $295,000, $285,000, and $270,000. In your appeal you could bring these to the attention of the government as properties it would have been just as appropriate to use in its calculations.
You might also try to make the case that while your house is superficially similar to certain others that have sold in the area in recent years, really it’s inferior and would sell for less than them for various reasons. Almost like trying to talk down the price of a used car you’re considering buying, you’d want to highlight everything undesirable about your property.
Finally, it’s important to look over your assessment carefully for simple errors of fact. People make mistakes after all. Maybe it shows your home as a detached house when in fact it’s a townhouse. Maybe it shows it as 3,000 square feet when in fact it’s 2,500. In an appeal you can bring errors like that to the government’s attention to be corrected.
In summary, be aware of the potential to save money on your taxes through a property tax appeal. When you get the assessment of your property, don’t think of it as written in stone. Think of it as the government’s way of saying “Here’s our tentative estimate of what we think your property might be worth. If we don’t hear back from you, we’ll assume this is fine and we’ll use it to calculate your taxes.” That means it’s your turn and you can challenge it if it would be to your advantage to do so.