“I am proud to be paying taxes in the United States. The only thing is – I could be just as proud for half the money.” — Arthur Godfrey, entertainer
There likely isn’t a soul alive that who wouldn’t be happy with paying less in taxes. While politics can debate the use of the money and whether or not it is justified, the fact that taxes are more often than not increasing is rarely disputed.
For home owners, there is a chance you may be paying too much in property taxes. The National Taxpayers Union says that 60% of homes are overvalued and are taxed as such. If you appeal, there is a high chance you can gain a partial deduction.
ADVICE TO APPEAL
Some of the basic steps and advice in the appealing process are listed below:
• Be expedient! There are often time limitations to get appeal application delivered to local government.
• If you are planning to file the appeal yourself, keep in mind that the instructions need to be followed precisely. If they are not, the legality of the appeal is in question and the appeal will not be considered.
• Find out what the evaluation of your property is based on and request these documents.
• Look for any errors in the description of the house. This is by far the easiest way to win your appeal. Look at number of bedrooms, square footage, or additions to the home.
• Look for errors in other houses that your house is compared to. For example, if your house has 3 bedrooms, but the comparable recently sold housing data listed is for 4 bedrooms, it may be enough to convince the tax assessor’s office.
• If you have recently purchased the home, check to make sure that the value listed on the property is not more than your purchase price. The argument that your lower purchase price is, in fact, the actual market value, rather than the estimated market value on the tax documents, is a strong case for decreasing the tax bill.
• If the assessor comes to do the assessment again, walk through with him/her. You want to help them see the negative aspects of your house and your neighborhood and these aren’t always obvious to someone assessing value.
Without appealing, there are sometimes programs within your state or county that offer tax breaks; these are often based on age or income. These are definitely worth looking into, however, as savings can be substantial. Together, George Washington University Institute of Public Policy and the Lincoln Institute of Land Policy maintain a database listing the tax breaks your state is offering (http://datatoolkits.lincolninst.edu/subcenters/significant-features-property-tax/Report_Residential_Property_Tax_Relief_Programs.aspx).
There are many tax consultants and tax attorneys that can be found through online searches. Be sure to find one who has good reviews and is credible. Often, it tax appeal lawyers will work on a contingency, meaning they are not paid unless you win your case. Their fee will be a percentage of the reduction.
So, while we all want to pay our fair share with taxes, no one wants to pay more than necessary. Know that a tax bill is a changeable document and understanding how the figures were arrived at can help to reduce it.