Appeal Your House's Assessment to Lower Your Property Tax Bill

Though I’ve lived in the D.C. area for the past 5 years, I still haven’t bought a home here. It just hasn’t made sense yet, especially since I’m not sure how many more years I’ll choose to stay in this area. The properties I do own are located back in Texas and stay consistently rented out. The two of them combined cost less than one comparable home here in northern Virginia, and that’s only talking about the actual property value, so I’m quite content with the arrangement for now.

I’m not yet sure if I’ll ever move back to the land of affordable homes. Either way, one thing is for sure: it’s hard to discuss the cost of setting down roots in D.C. without talking about property taxes. The biggest surprise, though? While it’s exponentially more expensive to buy a home here versus Texas, the property taxes are actually quite a bit lower!

This is pretty fresh in my mind right now, too, as I received a tax assessment notice in the mail just yesterday. For the third year in a row, one of my properties’ values is climbing up again. Last year, for instance, it jumped $5,000; this year, it’s climbing another $8,000. While this might be good news if I were looking to sell sometime soon, it’s not good news for a long-term rental property. A higher assessment, of course, means higher property taxes. And higher property taxes mean less money in my pocket.

Don’t Blindly Pay, Especially With an Increase

With high or climbing property tax rates, it’s worth the effort to try to reduce those rates, if at all possible. After all, when filing personal income tax returns, taxpayers look for every deduction and credit, often saving hundreds or thousands of dollars. However, most homeowners simply accept their property tax bill without questions, even though it could easily be a bigger bill than their income taxes.

Related: 30 Things to Budget for When Buying a Home

With the stress of income taxes done and behind us, now is the perfect time to take a look at your property value and the accompanying tax bill. The amount of property tax you owe is based on an assessed value of your house, and local governments typically assess properties every 18 to 36 months. This means that, depending on where you live, your assessment could have been performed when the market was at a peak. Add to it that the average assessments lag behind current values by about three years, and there is plenty of room for real-time error.

What If You Don’t Agree With the Assessment?

Homeowners could save thousands of dollars with a successful appeal if they only set aside a little bit of time to dispute the bill.

Of course, we’d like to think that our home values continue to increase because we want to feel that the decision to buy a home will result in a good investment over time. When it comes to assessments for tax purposes, though, it’s better to have the lowest value possible. Review your recent assessment, and consider these factors for appeal:

• Comparable home prices. Look at actual sales of houses in your area. Knowing the current market is a key to determining a fair assessment for your house.
• Age of the assessment. If the assessment is from over a year ago, comparable homes in your area might have sold for less money more recently.
• Room count and layout. Most assessments are accomplished without definite knowledge of your house’s layout. There could be mistakes in your assessment that result in a higher value on paper, like too many bedrooms. If your basement is unfinished, you could also argue for a lower assessment
• Amenities. When assessments are based on comparable home prices, you could be unfairly taxed if your home doesn’t have the same amenities as your neighbors’ houses. Don’t have a pool like the houses surrounding yours? Then, you shouldn’t have the same property tax bill.

After you receive notice of your newest assessment, review it quickly and appeal right away. You’ll be filing what’s called a Notice of Protest with your county’s ARB, or appraisal review board. Even if you would prefer to resolve your concerns informally — many appraisal districts will work with you directly to review and resolve your objections — filing this notice in time is still important, as it retains your right to escalate your dispute to the ARB at a later date. You typically have 30 days from the date the appraisal district mailed your new assessment notice to file your dispute.

You’ll want to review the property record card and look for inaccurate details. You can also take photographs of relevant features of your house and look at documentation for comparable home sales in your neighborhood. Make notes of any improvements you have made, as well as anything that may have depreciated your home’s value (a foundation shift resulting in structural damage, for instance, or mold remediation).

The ARB will typically give you about 15 days’ advance notice of your hearing, though you can occasionally postpone this to a later date, if needed.

When you have your hearing, bring all this documentation to support your case, along with copies to pass along to the board members and district representative. When presenting your case, try to keep emotional pleas out of your argument, and just stick to the facts. Firmly but respectfully present your reasoning, and hope for the best.

If you are unhappy with the decision of the district or the appraisal board, you can take your case even higher. In many states, you have the option of appealing to the state district court in the county where your property is located. Be sure to check your individual appraisal district’s options, by looking online or calling the local tax assessor-collector’s office.

It Doesn’t Hurt to Try

Authorities are aware that most assessments are inaccurate, but they won’t do anything about it unless homeowners speak up. Some homeowners are unsuccessful with the first appeal and simply give up — however, I would suggest that pressing on is worth the fight, especially if you’re paying high (or markedly increasing) taxes.

The county certainly isn’t going to do you any favors; if you want to lower your tax bill, it’s going to take some effort. The savings from a successful appeal could be substantial, though, so don’t give up until your home’s value is accurately assessed.