Some homeowners can't wait to see the assessed value of their home drop. In fact, they'll tell you the bigger the drop, the better. Why? Your property taxes depend on your tax rate and your property's current market value, which is determined by a local assessor. You can't dispute the tax rate, but you may be able to show why the assessed value is too high.
An appeal that results in a lower value could save you money for years to come.
Find out when you can file an appeal. Start the process by determining when you can appeal your home's value assessment. You may be able to find the deadline on your local assessor's website, which might also have instructions on how to file an appeal.
Some areas have a several-month window each year for appeals, often following the annual mailing of assessment value notices. In addition, you might be able to dispute your property's assessment following a renovation or if you just bought the home.
Check your current assessment for errors. Every year, you should receive an official letter stating the assessed value of your home. If you think your property value is lower than the stated value, start collecting proof to demonstrate your reasoning.
One of the first things to look for is a mistake on your property's description, which may be on the letter you received or on your property card – available at the assessor's office or online.
It's not unheard of for a property card to list an extra bathroom or incorrect square footage. Assessors aren't always able to look inside a home during an inspection, and they might not know about renovations to a home.
Make a note of errors and try to estimate the value of each. You'll be able to use these as a basis for your appeal.
Gather more evidence. To strengthen your appeal, you may want to find additional evidence.
• Make a list of comparable properties. Try to get a list of four to six similar properties in your area and their market value. You could use real estate websites that list recent or estimated sales prices, ask your neighbors or look through public databases to find official assessed values. If you find the homes' sales prices or assessed values are lower than yours, or similar but your home is in worse condition, you may have a strong argument.
• Estimate the cost of repairs. A leaky roof, cracked driveway or another issue could lower your property's value. Make a list of the faults, estimate cost for repairs and take pictures as proof.
• Make a note of changes in your neighborhood. A property's value depends on more than just the home. If nearby houses were recently foreclosed on or the schools' rankings dropped, your property could be worth less than it was before.
• Get a professional assessment. You could hire a state-certified appraiser to estimate your property's current value. However, the assessment might cost $300 to $500, and this might only be a good idea if your research already looks fruitful. In some areas, you may need an official assessment to file an appeal.
Once you organize your evidence, it's time to file an appeal.
Present your findings. The appeal process varies depending on where you live. If you have a simple scenario, such as a mistake on your property card, you might be able to make your appeal over the phone. But some counties require you to submit the appeal online or by mail, or you may have to schedule an in-person review at the assessor's office.
It could take several weeks to months to hear back. If the decision doesn't come back in your favor, you could file another appeal with an independent review board.
Bottom line: After gathering evidence, you can make a showing for why your home's assessed value is too high and potentially lower your property taxes. But think twice if you're considering selling your home soon. A lower assessed value might affect how much someone is willing to pay for the home.
Nathaniel Sillin directs Visa's financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney.