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All Contents © 2020The Kiplinger Washington Editors
By Sandra Block, Senior Editor
| April 19, 2019Updated March 10, 2020
Home values have risen across the country, which means many homeowners' property taxes are going up, too. The average annual property tax for owner-occupied single-family homes nationwide in 2018 was $3,498, an effective tax rate of 1.16%, according to Attom Data Solutions. States with the highest effective property tax rates were New Jersey, Illinois, Texas, Vermont and Connecticut. In Westchester County, New York, the average property tax is more than $17,000 a year. Now that federal deductions for state and local taxes are capped at $10,000, living in a high-tax jurisdiction has become even more expensive.
If your property tax bill has increased significantly, you may have grounds for an appeal, particularly if the increase seems out of line with overall appreciation in your area.
Most jurisdictions give you 90 days after you receive a new assessment to appeal, although some close the appeals window after 30 days, says Pete Sepp, president of the National Taxpayers Union. Some lawyers handle property tax appeals on a contingency basis, but most homeowners can appeal on their own, Sepp says.
Plenty of property owners challenge their assessments each year, and between 20% and 40% of them win lower assessments and lower property tax bills. The following steps will show you the way to success.
Schedules vary, but local governments commonly send assessment notices to homeowners in the first few months of the year. As soon as you get yours—or even before—check the deadline for challenging the value. You may have just a few weeks. And be sure you know how your locality assesses property.
Some set the tax assessment at a percentage of market value—80%, for example—so don't be smug if you get a $90,000 assessment on a home you think is worth at least $100,000.
When you get your property tax bill, check it for your tax rate, assessment figures and payment schedule, and make sure that you're getting the tax breaks you deserve.
Some states allow anyone who owns and lives in a primary home to shield a portion of its value from taxation. You may be eligible for credits based on your income or status as a senior citizen, veteran or disabled person. In Florida, for example, all homeowners are eligible for a homestead exemption of up to $50,000; those 65 and over who meet certain income limits can claim an additional $50,000. Illinois Gov. J.B. Pritzker recently signed legislation that will make it easier for seniors in Cook County—which includes Chicago and is the state's most populous jurisdiction—to apply for a property tax break of up to $8,000 a year.
Rebates and other property tax breaks aren't automatic: you usually have to apply for them and show proof of eligibility. Contact your state's department of taxation or visit its Web site to see what breaks are available to you.
Courtesy Montana Cadastral
Check your property's record card, which you'll find at your assessor's office or possibly on its Web site. This is the official description of your house, and if you see an outright error—indicating four bedrooms and three-and-a-half bathrooms for your two-bedroom bungalow, for example—the assessor may fix the problem on the spot, reduce the assessed value and your tax bill. That'll save you the trouble of a formal appeal.
We'd never tell you to keep up with the Joneses, but comparing your property to similar ones in your neighborhood will determine whether you have a solid case.
Pull up property cards of several homes of similar age and square footage and with the same number of bedrooms and bathrooms to see how their assessments line up with yours.
If you find that your assessed value is considerably higher than several similar homes, you may have grounds for appeal. But even if the assessment falls into the middle of the pack, it's not necessarily fair. Maybe your house has a leaky basement or lousy grading that doesn't allow you to have a garden. The assessment should be based on the market value of your home; if your place has issues that would turn off buyers, now's the time to own up to them.
The process varies by locality, but you'll likely send your appeal and your evidence—data on comparable properties, blueprints, photographs, repair estimates—to the assessor for review. You should get a verdict within a couple of months.
If you're dissatisfied, take your case to the appeals board and put your persuasive skills to work. Don't whine, and save your opinions on politics and tax rates for elected representatives who vote on those matters.
If you don't have time, or the stomach, to do battle yourself, get a hired gun to do the legwork for you. A professional appraiser can provide the strongest evidence of your property's worth. If your community allows outside appraisals—and if you're willing spend at least $250 -- find an appraiser with national certification, such as through the Appraisal Institute or the American Society of Appraisers. Don't fall for solicitations from law firms or other services saying they'll assist you in return for a high percentage of the savings on your bill—it's not worth the cost.
If you need added incentive to bring a skeptical eye to your real estate appraisal, remember this: A successful appeal is truly the gift that keeps on giving, year after year. Raise a toast to your success.