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Why You Should Consider Protesting Your Home’s Tax Appraisal

Your home is likely the largest asset you own. And paying taxes on something as significant as the value of your home every year is to be expected. What may come as a surprise, however, are significant hikes in your appraisal from one year to the next — especially if nothing has changed. While this can be exciting news if you’re looking to sell soon, it’s probably not if you’re sticking around and facing forking over some real cash.

Why are my property taxes steadily increasing?

Property tax is calculated by multiplying the tax rate times the tax appraisal. So if your home’s value has gone up, your property taxes will go up, too. While there are a ton of factors that contribute to a rise in your home’s value, there is one major theme: the real estate market has been getting hotter.

Property taxes are a big part of how local governments cover costs; and since their expenses don’t commonly go down, and raising the tax rate is never a popular move, homeowners can sometimes carry additional weight. The silver lining: there may be some flexibility when it comes to making a case for lowering your property taxes.

I suspect my home was overvalued. What do I do?

Maybe you overheard your neighbor with a similar floor plan say what they owe, or perhaps the increase just seems too farfetched. Whatever the reason, if you think the numbers could be off, there are a few approaches you can take. (Keep in mind: processes and procedures can vary significantly. Check with local officials on how the process works in your area.)

Check for any obvious mistakes or oversights

If this isn’t the case or you aren’t making any headway with this route, then you’ll need to go through the formal process of filing a dispute.

Tips for protesting more effectively.

1. Learn the process. To start, visit your county’s website to see a full list of procedures and deadlines. You will need to submit a dispute form to inform the county of your intent to appeal. Austin real estate specialist Tammy Dewitt Le has a couple of tips on filing:

  • Wait to file – Determine deadlines early, but submit your intent to appeal as close to the deadline as possible. If you do it earlier, you’ll get an earlier hearing date, which limits your ability to check other nearby properties that successfully disputed and find lower comparable values to present.

  • Don’t over-inform (yet) – Providing your personal estimate of the property value won’t earn you a gold star, but it could hurt you. By electing to fill in this optional field you could be shortchanging yourself, preventing an even lower assessment.

2. Build your case – Once your hearing date has been set, it’s time to do your homework. Your job is to prove how your house has been overvalued compared to other similar properties. A few approaches to take:

  • Compare yourself to others – Print out proof of similar nearby homes priced a lot lower than yours. You can typically go to your county’s site to find this information from street to street. Or you can reach out to your real estate agent and ask him or her to pull comparables on for sale and recently sold homes.

  • Look for flaws – Seems counterintuitive, but notable blemishes could increase your odds when challenging your assessment. Things like a really impractical layout; a noisy or inferior location near a busy street, train tracks, or commercial buildings; or noticeable eyesores like shingles falling off the roof that could be photographed, dated, and presented as support, only make your case stronger.

3. Be persistent – In some cases, an informal hearing with one county official will do the trick. In others, you might have to push a little further. It could go to a more formal setting with a review board made up of local assessors. If you still aren’t happy with their value, you can continue to appeal. All you’re out is a few hours of your time and possibly a $5 to $30 filing fee and could possibly save thousands, depending on the value of your home.

If you just really don’t want to do it, there’s also the option of handing it over to a professional. Hire a firm that specializes in protesting tax appraisals: it’s less work for you, but also less reward should you win.

Real estate tax appraisals are trending up, but at the same time, appealing your home’s tax appraisal is an option that’s available to you. So the next time that letter comes around, hopefully you’ll feel better prepared to roll up your sleeves and build a strong case for lowering your home’s value — and your tax bill!

 

For more details, here are some of the blogs I used to do research

1. "How to Dispute Your Property Taxes" via This Old House

2. "6 tips to make a case for property tax cut" via Bankrate

3. "5 Tricks For Lowering Your Property Tax" via Investopedia

Tags: Home Ownership