How Do I Appeal a Property Tax Assessment

QUESTION: I just received my property tax bill in the mail and it shows a new assessed value for my property, so my taxes are higher. What does a tax assessor do? How does a tax assessor determine property values? Can I appeal the assessment?

ANSWER: While no one likes to pay a bigger property tax bill, the silver lining to getting a higher assessment is that your property has increased in value. Your higher value probably doesn’t matter much to you right now unless you intend to refinance your mortgage, take out a home equity loan or sell it, but having more equity in your property and owning an asset that is increasing in value is definitely better than learning that your home has declined in value.

Your property tax assessment has been calculated by a tax assessor, an employee of your local government whose job it is to determine the value of various properties. Most properties are evaluated every one to three years to estimate their value for tax purposes.

Although the work a tax assessor does is similar to an appraiser, there are some differences. An appraiser is either self-employed or works for an appraisal company and is hired by a lender or an individual to determine fair market value for a property. Appraisers typically do a physical inspection of a property inside and out, in addition to relying on market statistics and other data. Tax assessors sometimes physically visit a home, but they rarely go inside a property. They base their property assessments on the estimated values of nearby properties and use computer programs to generate a value for your home.

An appraisal for sales purposes can vary by as much as 10 to 15 percent or more compared to a tax assessment because it’s based on the most recent market conditions. This is particularly true in areas where homes are assessed only every three years, since market conditions can change dramatically in that time and home values could have risen or fallen significantly. In many cases the assessed value is lower than the actual market value of a home.

It is important to realize that a tax assessor isn’t actually determining what you will pay in property taxes. In most states, the local governmental bodies set tax rates that are applied to every property owner. The tax assessor doesn’t have anything to do with setting tax rates or with collecting taxes. The only role of the tax assessor is to estimate your property value.

Appealing Your Assessment

If you believe the assessed value of your home is too high, you do have the right to appeal your assessment. Your property tax assessment should have an explanation of how to make an appeal on the form you received in the mail, but you can also search your local government’s website to find out how to begin the appeal process. Be aware that you will have to start the appeal process by a date established by the local property tax office. For example, in Washington, DC, property tax assessments dated Feb. 28, 2014, must be appealed by April 1, 2014. An appeal sent after that date will not be accepted.

Your appeal will need to be accompanied by a concrete reason why you believe the assessment is wrong, not just from an estimated value on a real estate website or an opinion. You should provide documentation of a recent homeowner’s insurance evaluation, a recent appraisal or, if you refinanced or purchased this home recently, a settlement statement.

If your appeal does not result in a lower assessment, and you anticipate being unable to make your higher tax payment, you should immediately contact your local property tax office and discuss options for tax relief.