An experienced real estate broker or agent has the best data on recent home sales, listings and the knowledge to interpret that data to win a real estate tax appeal and reduce your property taxes.
Public tax assessors do not visit your home to value it. They don’t even do a drive-by. And they have less information than the MLS– sometimes only beds, baths, square footage. Besides being incomplete, the data may be inaccurate (just ask Zillow, who uses public data). In determining your home’s market value, the tax assessor usually just looks at recent sales in your area and picks a number, often based on the highest sale. Don’t fret. You can fight city hall, if you know how.
How to Beat the Tax Man
The key to winning a tax assessment appeal is accurate data (recent sales & current listings of appropriate comparables) and the ability to argue, with proof, that your home is distinguishable from the homes used by the tax assessor. Armed with MLS data, your broker has inside information the tax man doesn’t. This valuable information and the expertise to evaluate different property characteristics to distinguish them for market value purposes is what an experienced real estate broker or agent brings to the tax assessment table. You can forget about a lawyer. They are useless in this contest. The broker will win the case here. In those jurisdictions that allow it, an appraiser can also provide evidence of market value. No, you don’t ever want to use a zestimate. Zillow may try to persuade you of the value of a zestimate based on median error rates, but it won’t fly when talking to the assessor about your home.
What are your chances? According to the National Taxpayers Union, your chances of getting a lower tax bill are about 1 in 3. But like most statistics, ignore them. You lose little by trying. And if you lower your tax bill, it helps on a future sale to have property taxes lower than your neighbors. Also, in a time of falling house prices, you have a better chance of winning, since the public data, like Zillow’s, is lagging the market.
A few pointers when fighting your tax assessment:
- Ask to see a written notice of your appeal rights
- File your appeal promptly (use certified mail RRR), according to the instructions. Make a copy for your records.
- Ask for an “in person” appeal. It’s much better than just sending in paperwork.
- Ask the assessor for the information used to calculate your assessment, including all comps and data on your home — remember, the public data may be wrong, right David Gibbons?
- Get your local broker to gather evidence to dispute the market value– recent sales and current list prices of appropriate comps– and put it in a written report, very much like a CMA report.
- Document (photos) the unzillowables, like the sewer drainage pipe next to your shore house or the steep (useless) lot you’re on, as opposed to your neighbors. Remember, the tax assessor is unaware of these unzillowables when it comes to your individual house, right David?
- Hire an appraiser if you are allowed to (some jurisdictions forbid it)
Tip For Brokers/Agents: Since you know how to prepare a CMA and can evaluate market values better than any tax man desk jockey, why not advertise and market yourself as qualified to contest property tax bills. Owners love to save money (and brag about it when they do). Learn the appeal process by calling some tax lawyers or colleagues that may handled such cases. Get a few property tax appeals under your belt and you become an expert, adding to your arsenal of skills which set you apart from the competition. Knowledge is power. Some California broker is advertising this service on craigslist.org.
[Author's experience: I have challenged my tax assessment on my beach condo the last two increases (because they were so unrealistic) and have won a property tax reduction both times. Once I was able to have them re-value a whole line of apartments because they did not assess equitably-- 2 & 3 bedrooms on higher floors (mine) were assessed more than those on lower floors, which would have been OK except the same was not done for 1 bedrooms, all of which were assessed the same. Under the law, that's a no-no. The reason I knew was because I had access to all the tax assessments in my building (they are public record) ]
Technorati Tags: tax assessments, propery tax appeals, Zillow, zestimates, MLS, CMA, real estate marketing
