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Tips for Challenging Valuation of Property

Because the impact of a tax assessment can be quite expensive for property owners, challenges to the valuations of properties are quite common. In most cases, owners are free to meet with the assessor to present their cases. Owners need to keep in mind that any changes must be based on evidence. Mere complaints that the owners think their taxes are too high will not lead to a reduction.

Tips for Challenging the Valuation

Property owners will need all the records pertinent to the valuation of their property in order to make a successful argument for changing the valuation. Make sure to scrutinize the accuracy of the assessor's information for obvious errors. If the assessor accidentally added an extra bedroom or bath in his assessment of the property, or figured the tax using the wrong taxing authority, these mistakes can make an enormous difference in the property tax. Owners should also request copies of the comparable sales information the assessor used to value their property. Examine these documents and closely compare their property's assessed value and those of nearby properties.

A valuation challenge may be successful if the appraisal overlooked hidden conditions such as a pest infestation, a cracked foundation, or other undesirable environmental conditions. These factors could adversely lower the property's value, and hence adjust the owner's appraisal downward. Additionally, certain exemptions in the property may negatively impact its value. These include veterans, prisoner-of-war, and homeowner exemptions.

Comparing Property Sales

In most cases, the best evidence of property value is comparisons of recent property sales within the same neighborhood. Because this is public information, it is not difficult to obtain; however, analyzing it and applying it to the owner's particular situation can be difficult. For example, the motivations of buyers and sellers can influence sales prices, but this information is very difficult to obtain. If there are no recent property sales within the property owner's neighborhood with which the owner can make comparisons, the next best alternative is to check for areas of comparison between the owner's property, and property that is reasonably similar to it. Consider factors like location, style, age, square footage, lot size, number of rooms, and so forth.

Following Procedure

Every state provides formal and informal methods to challenge tax bills. In both, adherence to procedure and time limitations are critical. Note that in most jurisdictions, homeowners must pay the assessed taxes even while their challenge is pending. If they do not, the taxing authority (municipal or county government, in most cases) may charge the owner interest and penalties on the unpaid balance.

The laws and procedures for disputing a tax bill vary considerably from state to state, although there are some common mechanisms for appeals. For example, most states have between two and four steps for appeals. The level of appeal after a complaint to the local assessor usually occurs at an administrative agency (e.g., county review board, county commissioner). Here, property owners may present evidence that supports their contrary opinion of an assessment or of a tax bill. Should they not convince the authorities at that level, there are usually additional procedures at a higher state level, or even recourse to courts. If litigation is the owner's next step, it is wise to hire an attorney whose specialty is representing property owners in these types of disputes.

Inability to Pay

If property owners feel that they cannot afford the taxes assessed on their property, they have little recourse. Personal hardships -- such as living on a fixed income or inability to pay -- are not considered in the assessment of taxes. The property's worth is the only criterion for assessing taxes on that property. Property taxes are not based on earnings, the original price of a piece of property (except in California), disposable income, or one's ability to pay. If property owners receive a large tax bill that strains their ability to pay the tax, about the only recourse they have is to apply for a hardship exemption or a tax deferral. Not all states have these procedures. If they cannot pay their taxes, they may check with their local collection office for the options that are available to them.

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