Your house is worth how much more than it was last year? Hot damn! You obviously made a smart buy. But while you're getting all excited about your great investment, you may not have thought about how it affects your property taxes... right up until that moment you open the mailbox and receive a notice that your rising equity means rising property taxes.
If your expenses just went up alongside the perceived value of your home, well, you're not alone. Appraisals all over the country, especially in states like Texas, have risen substantially over the past few years - a byproduct of having some of the strongest real estate markets in the country. According to the Dallas County Central Appraisal District (DCAD), "Tax assessments are rising 12–13% this year, said CBS, and, in other hot areas, they're up as much as 40%.
That's the downside of appreciating real estate markets. But that doesn't mean you have to live with it.
"Good news for Americans facing eye-popping property taxes: You can fight city hall, or whichever government body sends you this annual economic albatross," said Bankrate.
The knowledge that "as many as 60% of properties in the U.S. are assessed at a higher amount than their current value, according to the National Taxpayers Union, said Kiplinger, should give homeowners some solace, or at least a little encouragement as they try to knock that appraisal down a bit (or a bunch). If you're looking to lower those property taxes, here are a few things to try.
Understand what you're dealing with
It's important to note that while appraisals are generally based on a combination of local tax rates and assessed property value, they are not necessarily accurate on a house-by-house basis, Unless the government has a drone that's been spying on the inside of my house (they don't, right?), I'm quite sure they are unaware of how badly I need new floors. And a cooktop. And window coverings. In order to sell my home for what they've appraised it for, I would need to do some updating and repairs. Most of us would, and that can help if you're planning to dispute your appraisal.
Request Your "Property Tax Card"
"Few homeowners realize they can go down to the town hall and request to view (or receive a copy of) their property tax cards from the local assessor's office. The tax card provides the homeowner with information the town has gathered about the property over time," said Investopedia. Here you'll find information about your lot size, exact room dimensions, fixtures, and details about any improvements that may have been made over time. Find any errors? You may have just discovered the key to lowering your taxes.
"As you review this card, note any discrepancies and then raise these issues with the tax assessor. The assessor will either make the correction and/or conduct a re-evaluation. This tip sounds laughably simple, but mistakes are common. If you can find them, the township has an obligation to correct them."
Hire a professional
For many, the surest bet when fighting increasing assessments is hiring a lawyer, property tax negotiator, or consultant. Keep in mind, though, that you'll be paying for those services—anywhere from one-third to one-half of the money saved if the taxes are lowered.
Fight it yourself
If you plan to do it on your own, you need to prepare yourself:
First, locate your assessor's office. This will help you find out precisely how the property tax calculation is derived and get their criteria for home appraisals.
Fight it in person. According to experts, this is the most effective way to dispute your appraisal. Emails are often ignored or requests flat out refused. And make sure you "come armed and ready," said Banking My Way. Gathering comps from your real estate agent that outline recent sales for similar homes in your neighborhood is key. Taking pictures of areas of your home that need repair or aren't in "selling shape" to illustrate why the higher appraisal number is inaccurate can also help.
Put Zillow to use for you. We've talked at length about the inaccuracies of Zillow's Zestimates. But in this case, that might help bolster your case. Zestimates for your home and similar homes in your area showing lower than the appraised amount? Print out those pages and add them to your file.
Network. If your community's Nextdoor community is as lively as ours, it's full of discussions and information about property taxes and appraisal disputes. Using social tools like this can help you get to know what your neighbors are up against and find common solutions specific to your neighborhood. It may also help you find someone to help guide your dispute.
Do some reconnaissance. Neighbors with the same floorplan across the street have a pool? Make sure to mention that in the file you're putting together. Know who's redone their kitchen? Note that as well. "What many individuals don't realize is that in many cases, information about other home assessments in the area is also available to the public," said Investopedia. "You can often find discrepancies that could lower your taxes. For example, let's say that you have a four-bedroom home with a one-car garage, and your home was assessed at $250,000. Your neighbor also owns a four-bedroom home, but this house sports a two-car garage, a 150-square-foot shed and a beautiful swimming pool. Despite this, your neighbor's home was valued at $235,000. If an error is found, it pays to bring it to the assessor's attention as soon as possible so that you can get a reassessment if necessary."
Pay attention to the timeframe
Filing an official protest has to be done within a certain timeframe. You don't want to miss out on savings because of a missed deadline. In Texas, property owners only have until May 31 to challenge their property tax assessments.
"Most municipalities differ, with some towns stipulating that you only have 14 days from the time of your property tax assessment to appeal, and some may go as high as 60 days," said Banking My Way. "Your town's tax appraisal office will have the deadline information."