ABA Family Legal Guide

Home Ownership

The Financial Side of Home Ownership

Tax Considerations

Is there any way to lower the property taxes on my house?

To lower property taxes, you need to lower the assessed value of your property, which is the basis for calculating your taxes. By providing evidence that the assessed value of your home or business property is too high, you should succeed in lowering the assessment and consequently your property taxes.

In most states, an assessor or a board of assessors places a value on your property for tax purposes. If the property has recently been sold, its sale price will be an important factor in setting the value. If there has been no recent sale, they will estimate its market value using other evidence. This assessment may be done annually or on some other schedule, such as every four years. In most cases, then, the assessor uses a complicated schedule to get from appraised value to dollar amount of taxes owed. For example, in many states, the value is reduced by a certain percentage, then multiplied by the local property tax, or millage, rate to establish the amount of taxes you will actually pay.

Your role in the process should begin when you get a notice indicating the assessed value placed on your property. If you think it is too high, you will want to file an appeal as soon as possible. To challenge the assessment, first look for obvious mistakes in the notice. Make sure the address and description of your property is correct. It may be necessary to look up the information about your home at the assessor's office. Check to make sure the number of rooms, the number of bathrooms, the square footage, and other details are accurate, and make a note of any discrepancies.

Next, check to see if you qualify for a special tax break. Some jurisdictions provide tax breaks to certain categories of property owners. For example, tax waivers of 10 percent or more may be available to owner-occupied homes, owners age sixty-five and older, disabled veterans, and persons with certain disabilities. Finally, make sure the assessor has any information about damage to the property, such as flood or fire damage. If any of these conditions apply, ask your local assessor's office how to file an appeal and note any of these problems in your appeal.

Even if none of these special conditions apply, investigate whether the market value determined by the assessor is higher than the true market value of your property. Local real estate agents or the county registrar of deeds should be able to provide recent sales figures of comparable or similar properties in your area. Also, check the assessed value of similar neighboring properties; this is public information in most places. Remember, however, that the assessed value is based on the market value of your home on a certain date the previous year, not its current value.

Once you have the information you need to protest your assessment, you will either be required to fill out a form or make an appointment with the assessment board. Be prepared to bring facts and figures. If your appeal fails, you may appeal that decision to a special board of equalization, a board of appeals, a state court, or a special tax tribunal (depending upon the state in which you live). State laws vary as to how and when property is assessed and appeal procedures. For specific information, consult your local government officials or your lawyer. Just remember, if your inquiries result in a visit by a tax assessor who didn't realize you have added a swimming pool, you could end up with a larger assessment.