Christian Information Network

When retired adman Alex Drexler drew up a budget for his 1991 expenses, the last thing he expected was a $553 hike in his property taxes. He and his wife, Dorothy live on a fixed income, and they were still fuming about 1990’s $565 tax increase on their Cape Coral, Fla., home. This time, Drexler decided to do some digging at the Lee County assessor’s office-and discovered that an error had increased the home’s living space by 56 percent. “We’d put a pool in, and they’d added it to the square footage,” Drexler says. A simple remeasurement cut the Drexlers’ assessment from $116,140 to $91,050. Drexler expects a rebate in next month’s mail, though he isn’t sure how much it will be.

In taking on city hall, Drexler has plenty of company. Stung by tough economic times and an ailing housing market, homeowners seem to be spoiling for a fight. Townships and counties across the country report that taxpayer appeals are up. So far this year, for example, 8,700 residents of Nassau County, N.Y., have appealed their property assessments, compared with 3,527 last year. About two thirds of appeals are successful; the average rebate this year is about $500. In Ventura County, Calif., this year’s taxes dropped for 1 in 5 homeowners as assessments on 30,000 properties were cut to reflect plunging home prices. Yet appeals have soared to 1,200 for the year ended September 15 vs. 800 for the previous year. The victory rate is about 40 percent, producing typical tax savings of $300 to $350.

Considering the impressive success record – up to 80 percent in some places – it’s surprising that even more people aren’t challenging the local assessor. While getting an unjustified assessment knocked down a peg may seem daunting, homeowners willing to put in a little research time can usually tackle the job themselves, at virtually no cost. Dawdle, though, and you risk living with your current taxes for another year. Some state deadlines require a speedy response. Alabamians must act within 10 days from receipt of their assessment, for example.

Girding for battle. Understanding how an assessment is figured and how to complain about it is half the battle. Some 13,500 local governments have the power to assess property values, and their methods and appeals procedures vary widely. Wherever you live, you’ll have to hack up at least one of three contentions: The facts are wrong, the assessment is too high for the market, or the assessment is unfair.

You will do most of your detective work in the assessor’s office. Nearly everything you need to know about your assessment is on a property card or computer printout, available for free or a nominal charge. The information is public, but you’ll need the property identification number from your tax bill to access it. Errors are commonplace, and even homeowners who don’t
have a tax gripe might want to pull their property cards. “I think it’s time to consider checking every year,” says Sue Pitts, 45, a Brookfield, Ill., homeowner who sliced her 1990 assessment by $2,000 by catching a few goofs. Pitts had been taxed on a garage addition that was supposed to be exempt until 1993. While investigating the garage, she found she had been taxed for two years for a half bath she’s never had. Miscalculating square footage is probably the most common error. Others include miscounting bedrooms or fireplaces, listing a nonexistent basement or misstating the
style or construction of the home. While you’re at the assessor’s office, you can make sure you’re getting any tax breaks to which you are entitled. The elderly, the disabled and veterans often qualify for exemptions.

Proving that an assessment is too high is trickier than finding factual errors because setting the value of a home is as much art as science. An independent appraisal by a professional that yields a market value lower than the assessor’s is a virtual bulletproof argument for a reduction, but you’ll have to weigh the cost of around $250 against the potential savings. Teacher Linda Shaffer, 43, used an appraisal commissioned by the former owners of her Ventura, Calif., house to lower its assessed value from $285,000 to $246,000-much closer to the $236,000 she paid for the house. “I
would never have paid the money they had my home assessed at,” Shaffer says.

Cheaper and handier alternatives are at hand, but they’re likely to be less effective. You’ve already paid for an appraisal if you’ve recently gotten a home-equity loan or refinanced your mortgage, instance, but a lender’s appraisal may carry less weight with some assessors than an independent one. A real-estate agent’s estimate is still another possibility. It’s less persuasive than a professional appraisal but might work. You can, of course, come up with a price tag for your home yourself, starting with selling prices for houses comparable with yours. Local real-estate agents
can provide lists of recent comparable sales and usually don’t charge for the service.

Hunting down comps. The real homework begins once you’re armed with the list of comparable houses, or “comps.” You have to adjust for differences between your home and the comps. Real-estate agents, appraisers and the tax assessor should be able to supply dollar values for fireplaces, full basements, garages and other features. If a comp has a finished basement and your house doesn’t, for instance, you would subtract the value of a finished basement, say $2,500 from the value of the comp to make the two equivalent. Averaging out the adjusted prices of the comps should give you a defensible market value for your home. Most states then multiply the market value by a percentage, set by local law, to get the assessed value. A $100,000 house in an area with an assessment ratio of 30 percent would be assessed at $30,000, for example. Some homeowners who think they’re getting a break are actually mistaking the assessed value for the market value.

Assessments must, above all, be fair. Consider the case of Marc and Gail Auster of Montclair, N.J. They successfully challenged their 1990 assessment when they discovered that their land was valued too high compared with their neighbors’ lots. A peek at the property cards (if their neighbors showed that houses across the street had land values averaging around $10 a square foot, while those on the Austers’ side weighed in at $22 a square foot. An appeal brought the land down to $l8 a square foot, obviously not as much as the Austers would have liked but a significant savings nonetheless.

An easy fairness test is a check of the relationship of sales price to assessed value for nearby properties that have sold recently. This is a good method to use when comparable houses are nonexistent or in short supply. Say the assessment ratio in your area is 33 percent, meaning that a house worth $100,000 would be assessed at no more than $33,000. If most of the homes sold are in fact assessed at 24 percent of their recent selling price and yours is at 30 percent of market value, you’ve got a case, even though your assessment is below the legal limit.

The work involved in a challenge can be taxing, and intimidating besides. After the Austers sat in on a session of the Essex County Appeals Board, they knew they needed help. “The town’s attorney was very aggressive,” says Gail, 39. “We realized you have to know what you’re doing or they make a fool out of you.” The Austers hired a property-tax consultant to help prepare and argue their case. The consultant, a professional appraiser, charged $575 to appraise the house, counsel the Austers and testify as an expert witness at their appeal. As it happened, the appraisal also turned
up square-footage error. After adjusting for the land value and square footage, the Austers’ assessment was lowered to $325,700 from $386,100, saving $1,450 in taxes. Such property consultants work for an hourly fee or on a contingency basis, taking half of the first year’s tax savings on a successful appeal.

Do it yourself. But homeowners should be wary. Since property consultants are entirely unregulated, it’s important to get and check references. Besides, “that level of expertise may not be cost-effective,” says Dean McQuown, director of professional services at the International Association of Assessing Officers, a trade group for government tax assessors. “The average homeowners should be able to appeal on their own.”

There’s plenty of help for do-it-yourselfers. Most tax districts have pamphlets explaining the appeal process. Homeowners can write to the National Taxpayers Union for the booklet “How to Fight Property Taxes” ($2 postpaid to 325 Pennsylvania Avenue, S.E., Washington, DC 20003). A new book by property consultant Gary Whalen, “Digging for Gold in Your Own Backyard: The Complete Homeowners Guide to Lowering Your Real Estate Taxes” ($19.95 plus $3.05 shipping to R.E.I. Press, 36 S. Washington Street, Hinsdale, IL 60521), has a state-by-state guide to the appeal process, including deadlines. “Fight Higher Real Estate Taxes and Win!” a $39.95 video from Better Insights Inc., (800) 321-3439, comes with a workbook that makes the number crunching easier.

You needn’t feel civic embarrassment about haggling over your fair share of the community chest. In fact, you will probably be in good company. Just ask attorney Avron Rifkin, who is appealing an assessment that bumped up the value of a client’s Jupiter Island, Fla., home from $509,312 to $682,320, boosting the tax bill by about $3,400. The client? Dorothy Walker Bush, 90, the president’s mom.

(The original source of the above material is unknown.)

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