Higher taxes may also make a property less appealing and affordable to buyers, since higher taxes will increase their overall costs, at least until the property is reassessed. That's why it's a smart strategy for us to advise our past and present clients who might be considering a sale to appeal their property taxes at the next opportunity.

Evaluating Your Assessment

The vast majority of taxing jurisdictions throughout the United States assess residential property based on market value: the amount a willing buyer would pay a willing seller without duress. However, assessments are generally not reviewed on an annual basis, so a property's assessment will never be 100 percent of market value. 

To compensate, taxing bodies apply an equalization ratio, which is designed to ensure that assessments are relatively equal among different taxing districts to all assessed values. For example, a property worth $100,000 with an equalization ratio of 50 percent would be assessed at $50,000. Home owners can obtain their equalization ratio from local taxing authorities.

If, after a review with a residential broker or appraiser, a home's assessed value seems out of line with current market values, the home owner should undertake an investigation to determine what might have caused the incorrect valuation. Here are some steps for our clients to follow.

1. Arrange a visit with the local tax assessor and request a complete copy of the home's tax records. Property record cards are public records and are available to you.

2. Pay particular attention to the market comparables listed on the assessment card. These recently sold homes are the basis for the assessor's valuation of your home. Visit those houses or view them online, and compare them to your house. (Better yet have us do the work for you.)

3. Take the appropriate equalization ratio and multiply the market value you believe appropriate for the home by that rate. If the number is lower than the current assessment, you should file a tax appeal.

Filing an Appeal

Most home owners should be able to properly file the appeal without help, but most jurisdictions require a licensed real estate appraiser to prepare an expert analysis of local market values for the local tax board. We have done hundreds of valuations for our clients.

Homeowners should work closely with an appraiser to review all the amenities and issues that might affect the valuation of their home. Many times an appraiser may not be aware of construction, zoning, or general neighborhood issues that negatively affect value. 

Real estate professionals familiar with the property and the area may also be a valuable resource for this type of information. They may also be able to assist the appraiser in determining which properties are the best comparables for a particular home. All of the appraiser's conclusions need to be properly documented with supporting evidence in the appraisal report that will be submitted with other supporting paperwork prior to the hearing. In the Lake County area the taxing bodies will accept a professional Market Analysis from your real estate professional.

In addition to compiling evidence, the taxpayer should take care to learn and follow the rules of the local board of assessment review. Each taxing jurisdiction has appropriate appeal forms. It is also critical to determine the deadline for filing an appeal.

The final step in an appeal is a hearing before the assessment appeal board. Proper preparation is the key to a successful hearing. The homeowners and the appraiser should prepare a script detailing the important points that need to be made during the appraiser's testimony in order to prove a lower market value and assessment. This process can save you thousands of dollars a year.

The key focus should be comparing the home in question with every presented comparable. The appraiser / realtor should be prepared to analyze each important amenity and discuss how it positively or negatively affects value.

During uncertain economic times, the effort of appealing a property tax bill reduction may prove well worth the time and effort involved. We fought our taxes on an apartment building we own and WON! So have all of our clients.

If we can assist you with a new home evaluation so you can make your case at the assessor's office, please leave your contact info below and we will call you at our earliest convenience. There is no charge for this service. All we ask in return, is if you hear of someone who needs to buy or sell a home sometime in the near future you will think of us.

Ron and Kat Becker