A Property Tax Assessment May Not Reflect Fair Market Value
Property tax assessments are not the same as property appraisals. A property tax assessment is what the taxing district thinks your home is worth, based on mass computerized data models. A property appraisal, in contrast, determines the fair market value of your home if it were to sell under normal market conditions. If you think your tax assessment is too high, you can appeal the value of your property that was assessed by the taxing district.
For a successful property tax appeal you should:
- Know Your Rights
- File Your Protest on Time
- Get Organized
- Do Your Research
- Hire a Certified Residential Appraiser
Residential Tax Assessments vs. Property Appraisals
In brief, tax assessments use mass valuation models to determine the taxing value for each home in a taxing district. These models use huge amounts of data in a property database to determine the assessed value for each property. This data may include the number of bedrooms, size of the lot, number of garage spaces and the size of the home, for example.
The data used to determine the value for your home may be wrong.
A professional property appraisal, performed by a Certified Residential Appraiser, does not primarily rely on data about an individual parcel of property that is already in a database. Instead, it relies on data individually researched and identified by the professional appraiser who is appraising the property.
To read the extensive list of steps an appraiser (not the tax assessor!) takes to determine Market Value of Property, please read our article on Appraisal Steps: Determining Market Value of Property.
Appealing Your Tax Assessment
Different taxing districts have different procedures for appealing your property tax assessment. Although hiring a professional appraiser to provide a comprehensive report about the Fair Market Value of your property can be an important part of your appeal, it also makes sense to do some research on your own, first.
Here are some general suggestions for improving your chances of a successful appeal:
Know Your Rights
- When you received your tax valuation letter, it should have included instructions for appealing your property tax valuation. It is very important that you follow these instructions exactly, because that will determine whether or not you have the opportunity to appeal the decision in front of the tax board, or in front of the local authority that can change your assessed value.
- If you don’t have a copy of these instructions, you can get them by either visiting the taxing district’s web site, or by calling and asking if a copy can be mailed or faxed to you.
File Your Protest on Time
- Make sure you file your protest on time, in the format required. You will most likely need to do this before you have had a chance to gather most of the data you will need.
- Make sure you keep a copy. If you can fax it, keep the receipt for the successful fax delivery.
- Make sure you keep all of your correspondence together in one file, so you have a record of your work.
- A binder with tabbed sections for each year you protest will help you stay organized.
- Write down the name, title, phone number, email address and date for every single conversation you have with any official person. Keep these notes in your binder.
Do Your Research
- In Texas, you can usually find the tax assessment value for your street on your taxing district’s website. This can help you understand whether or not your property valuation is consistent with the other homes in the neighborhood, or if yours is an outlier (a property that is valued significantly differently than similar properties).
- If your home’s value is inconsistent from the others in the neighborhood, you may have a better chance for your appeal.
- If you think that other homes in your neighborhood also have tax values that seems way too high, it may make sense to talk to your neighbors about appealing their values, too. If your neighbors accept the year-over-year increases without protest, it can get harder to appeal your own home’s value because it may be compared to the other (high) ones in the area.
- If your value is really low compared to the other ones in your neighborhood, well, that would be a good thing!
Hire a Certified Residential Appraiser
The Value of a Certified Residential Appraiser
The Uniform Standards of Professional Appraisal Practice (USPAP), which we strictly adhere to, require that an appraisal be an unbiased opinion of value.
That means we won’t perform appraisals for our own neighborhood, for friends, relatives or even people that we have a business relationship with, such as someone in the position to send us more work.
When you hire us to appraise property for a property tax assessment appeal, you’re ordering an independent, third-party professional appraisal report.
If you are right that your property has been overvalued by the taxing district, an independent and unbiased report such as ours will be even more persuasive than other data and evidence you find and present to the tax board on your own.
If you find that you must schedule a formal hearing for your tax assessment appeal, we can testify on your behalf. Please browse our website to learn more about our qualifications, expertise and services offered. When you order your appraisal, we want to make sure you are as comfortable as possible that you’re hiring unparalleled professional quality work.
Real Estate Tax Deduction says
Assessed value does not necessarily reflect the amount paid for a property or what the property is worth today. It is based on a computerized evaluation of the presumed size, location and condition of the property on January 1st of the previous year. There are factors such as increasing or decreasing values, distress sales, property damage or changes in use that could cause an assessment to be different from today’s actual market value.
“Do you think your property tax assessment is incorrect? If so, you may appeal the assessment.
First, a few reminders may be helpful . The term “taxable value” was introduced in 1995. It is the value used to calculate your property taxes. Annual growth in taxable value is capped at the rate of inflation, or 5 percent, whichever is less. The State Equalized Valuation (SEV) must still reflect 50 percent of the property’s true cash value and may increase by more than the rate of inflation or 5 percent in any particular tax year. It is important to remember that your property taxes are no longer based on the SEV.
If, despite this information, you believe your assessment is in error, you may appeal to your local Board of Review and, if necessary, the Michigan Tax Tribunal.
The appeals process costs you nothing but time, and no attorney is necessary. The attached step-by-step guide, along with your willingness to explore all the possibilities, may help you obtain a favorable adjustment.”
Pam Umstead says
I have a parcel of land 195 acres, no dwelling on it, only 2 small oil jacks. It is being leased for cattle. It is quite overgrown with mesquite and cedar at this time. My “Agriculture or Timber Market Value” appraisal has nearly doubled since last year, despite the fact that there have been no changes made on the property. Is this an issue that you can handle?
Orlando Masis says
Unfortunately not. Your best bet is a local appraiser who specializes in farm/ranch/ag land.