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How to Books On Line
TABLE OF CONTENTS Introduction 3 Educate Yourself 5 Look for Mistakes 6 Challenging Your Assessment 7 Informal Meetings 8 Formal Appeals 9 Summary of Assessment Offices 11
INTRODUCTION Of all the taxes you pay, probably none delivers more tangible benefits than the property tax you send to your city, town, or county. Real estate taxes are the lifeblood of local governments, accounting for some three quarters of their budgets for schools, sanitation, parks, and public safety--in short, for just about everything that makes the quality of life in your community what it is. But even if you're satisfied with what your property-tax dollar buys, you should not have to pay more than your fair share. Your local tax office computes your annual property-tax bill by multiplying the local tax rate by the assessor's estimate of what your home and the lot it sits on are worth. The rate is set by your community's elected officials and applies equally to everyone. However, if you pay substantially more than your neighbors do or if your locality hasn't had a general property revaluation in several years, your tax assessment may be too high. What do the records show? The most basic errors arise from a simple mis-description of your property in the municipal records, and this is where you should look first if you suspect a problem. The listing should specify the lot size, type of construction, number of rooms, and so forth. Overworked assessors usually cannot inspect every property they are required to value. Often they rely on casual "drive by" assessments, leading to mistakes in the property records--an extra bedroom here, a bath there, a garage instead of a carport. The assessor may also have missed defects such as a cracked foundation, a leaky roof, or pest infestation that could significantly reduce a home's value. Undesirable environmental conditions, such as unusually heavy local traffic from a nearby freeway, can also lower a property's value and may be grounds for a tax reduction. Assessing the assessment Most municipalities try to peg the assessed values of properties in their jurisdictions to the actual market values. However, unless the properties are re-appraised often--something few communities do--the valuations tend to drift apart. Some states try to bridge the difference during periods between full-scale reevaluations by applying a so-called "assessment ratio." In one New Jersey city, for example, a home carried on the tax rolls as having a market value of $100,000 would be taxed as if it were worth $106,952, after its ratio- currently 93.5 percent--is applied. A homeowner who thinks this figure overstates the market value can challenge it, although in the Garden State, unless an assessment exceeds the estimated market value by more than 15 percent, the assessor's computation will prevail. Many owners may be lulled by an apparently low valuation into thinking that their tax bite is lighter than it truly is. That's because some states tax properties on just a portion of their assessed value, as little as 10 percent in Louisiana. A fractional valuation, however, can mask a high assessment. For example, if you live in a $100,000 condo located in a state with a 25 percent valuation and your property is misassessed at $30,000, your tax would be equal to that of a neighbor living in a home worth 20 percent more. Making your case There are several ways to document a claim that your assessment is too high. The easiest is to point out obvious discrepancies between the description of your home in the official tax records and its actual condition. Often the assessor's office will adjust your record on the basis of a single meeting if you can produce compelling evidence that the assessment is incorrect. You can also buttress your claim by tracking recent sales of three to five homes that are similar to yours and located nearby. A local Realtor, Consumer Reports Home Price Service, or even the assessor's own records can help identify these comparable properties. If the potential savings warrant the expense, you may wish to hire an appraiser who is certified or licensed by your state to prepare a customized valuation of your home. Expect to pay between $400 and $500 for this service. A formal appeal usually requires a hearing before the local appraisal review board. Typically, you'll have to pay all taxes due while your appeal is pending, though some municipalities will give a refund if you win your claim. Daunting as it sounds, most homeowners can manage an appeal by themselves. If you don't want to go it alone, a local real estate agent may be able to refer you to a property-tax consultant or an experienced attorney. If too many owners challenge their tax bills successfully, of course, a local government would have to ratchet up the tax rate to provide the services residents say they want. But that's a fair way to meet the community's needs and one that lets the citizens determine what good government truly costs. STEP 1: EDUCATE YOURSELF When it comes to property taxes, timing is everything. First, call the assessor's office to find out the two crucial tax dates for your community. The first is called assessment or valuation day. It's when the information the assessor has on your home becomes the basis for assessing its value. The second is called the tentative roll date. This is when the town tentatively sets the actual tax amount individual homeowners will pay. Start working on your appeal between those two dates. Most states require that you be notified after the tentative role is set if there is a change in the market value, assessed value or tax rate of your home. Although the notice includes a deadline for filing an appeal, often the date doesn't leave enough time to gather and submit the information, forms and proof needed to make your case. Miss the deadline, and you forfeit your right to appeal until next year. Give yourself more time by beginning to check the information used to determine your assessment before the tentative assessment role is set. While you're checking on the exact dates with the assessor make an appointment to review the property-record card for your home. It includes lot and house size, the number of rooms and everything else used to compute the assessment of your home. You'll probably have to dig out an old bill to get your home's identification number for the assessor. Then visit the assessor's office to copy the card for your records. While there, find out the guidelines for challenging your assessment and what constitutes proof. The assessor might also have brochures to help you through the process. Some states even have advocates who help you prepare and file your appeal. So be cordial. Another tip: "Don't call them tax assessors," says Joseph Hesch, the public information spokesman for the New York State Office of Real Property Services. "They're very sensitive about that because they assess value, not taxes. Politicians set taxes," notes Hesch. Simply call them assessors. STEP 2: LOOK FOR MISTAKES Take the property-record card home and carefully examine it for mistakes. Look for glaring errors such as the wrong number of rooms, a listing for a garage when you don't have one and dimensions for a lot larger than the one you own. Call the assessor's office immediately if you find any mistakes, in some locales, your word alone might be enough. But most municipalities require proof--photos, blueprints or inspection reports. Ask the assessor what's needed. Although the information on your property card should be accurate and current, correcting a mistake won't always reduce your assessment. "If the error doesn't change your home's market value much, it won't affect your assessment," says Hesch. What if the error is in your favor? Experts say you should probably admit it, especially if you plan to challenge the assessment on other grounds. Your property-record card should also list any exemptions you're entitled to. Exemptions lower the assessed value of your home by a certain percentage. Common ones are those for senior citizens and veterans or spouses of veterans. Less common exemptions include those for low-income home owners, disabled victims of crime and those whose property is located in an economic improvement zone. Exemptions for energy-efficiency improvements, restoration of historic structures and improvements that make a home more accessible to the disabled usually exempt only the value of the improvement from the assessed value of a home. Check with local and state authorities to find out available exemptions in your area. STEP 3: CHALLENGING YOUR ASSESSMENT If your property-record card is correct, or if correcting it has not changed your assessment, there still are two other grounds for appeal: excessive assessment and unequal assessment. Excessive assessment simply means your home is worth less than its assessed value. If you refinanced your mortgage within the past year, your bank or lender will have had your property professionally appraised. Get a copy of the report and see if this recent market value is lower than the one set by the assessor's office. If it is, use the report as proof. If you haven't refinanced recently, check with local Realtors for the addresses and selling prices of similar homes in your area. The assessor's office can also help you locate comparable homes. Or you can pinpoint recent sales using a phone-in search service. These firms typically charge by the minute for phone time. Remember, the more evidence you gather, the better. Having your home re-appraised is the most expensive option, though it's often the most effective. The word of a licensed appraiser will have more weight than other types of information. Professional appraisals typically cost $100 to $400. But unless you expect to reap large gains, a reappraisal might not be worthwhile. It's also possible that the value of your home has been decreased by conditions the assessor's office isn't aware of or has not considered. A cracked foundation, termite or carpenter ant infestation, the building or widening of a road next to your home or the placement of a new factory or dump nearby can all lower property values. So can environmental hazards such as radon, asbestos or lead in your home or a buried oil tank in your yard or driveway. But you'll have to prove it, and environmental hazards are trickier to prove than other conditions, since their effect on value isn't well documented. Again, local Realtors can help you by revealing how home sales have been affected by these problems. Realtors can also provide information on cleanup cost. This is an effective way to determine how much each condition lowers the value of your home, since most buyers would want the problem remedied or the asking price reduced by that amount. Remember; get addresses and information on asking and selling prices in writing. Unequal assessment means your home has been assessed at a higher value than comparable homes in the area. For example, suppose the value of your house has been assessed at $200,000. If you can prove the value of a similar home in your neighborhood has been assessed at $175,000, you can challenge your assessment on the basis of unequal assessment and have the assessed value of your home reduced. STEP 4: INFORMAL MEETINGS Think of the appeal process as a ladder. The first rung is requesting an appointment with an assessor. No forms. No costs. No sworn testimony. But don't be lulled into thinking this informal meeting is a simple chat where you point out errors and the assessor fixes them. Be prepared to prove your case. You should know what you want and why you're entitled to get it. And you should have all your evidence with you, including an extra copy for the assessor to examine while you talk. Pay particular attention to the questions assessors ask; they're clues to what he or she thinks is important. Be calm, yet firm and persistent. Remember, what you're challenging is your assessment, not your taxes. Start proclaiming that your taxes are too high, and you'll lose credibility. Depending on the laws in your area, your assessor might not be able to change much at an informal meeting. If you get only some or none of what you ask for at this time, find out why. This is the part of your case you need to strengthen when you move up the ladder to a formal meeting. STEP 5: FORMAL APPEALS Formal appeals are not automatic. You must request one, get the proper forms, follow their directions to the letter and submit the forms and evidence by the deadline given. Your local or state authorities probably have pamphlets to help you fill out the paperwork. They might even have staff or advocates who can help. Another good source to check at this stage is the case files of your local board of review - where your formal appeal begins. These records are public. Examine cases similar to your own to learn which strategies and evidence worked and which didn't as you prepare. Most important, be careful what you ask for. In some states, you can only get the reduction you ask for even if circumstances show you should get more. Your first formal appeal essentially is a hearing at which you present your evidence and the assessor also gives testimony. Again, it's up to you to prove that the assessor is wrong. Also remember that your case is probably one of many the board will hear. Make it stand out by being well-presented, well-organized and mercifully to the point. The board's decision will be mailed to you. Even if your first formal appeal is successful, you will probably have to pay your taxes and then get a refund. And there might be some nominal costs for processing your paperwork. If you're not satisfied with the decision by the board, you might be able to appeal to a county or state board depending on laws in your area. There will be new forms to fill out and deadlines to meet and, possibly, more costs involved. But for all practical purposes, it's the same show for a different audience. Before you take your show on the road, read the decision from your local board and make a photocopy of your case file. Why didn't you win? What points didn't you make during the appeal? Why wasn't the board convinced? Learn from your mistakes and capitalize on any the assessor made. Then be sure you really have something to add that will convince the county or state board that the local board and assessor's office are wrong. If you lose this second formal appeal, you can still take your case to court. But at that point you'll probably want to get yourself some legal help. Challenging your property assessment is not without potential downsides. There's a chance the information that you uncover during the appeal process will result in raising your assessment, which will increase your taxes. Your local assessor's office can tell you this before you undertake the appeal. But in many cases, attempting to slash your property taxes is virtually a no-risk opportunity. And those are the best kinds. STATE BY STATE SUMMARY OF ASSESSMENT OFFICES State of Alabama Department of Revenue Ad Valorem Tax Division Montgomery, Alabama 36132-7210 (205) 242-1525 State of Alaska Dept. of Revenue Petroleum Revenue Division 550 W. 7th Ave.- Suite 300 Anchorage Alaska 99501 (907) 276-2678
Arizona Dept of Revenue Division of Property Valuation Jane McVey- Asst. Dir 1600 W. Monroe St.- 8th Floor Phoenix, Arizona 85038 (602) 542-3529 Arkansas Assessment Coordination Div. Public Service Commission John Zimpel 1614 W. Third Little Rock, Arkansas 72201 (501) 334-9240 California State Board of Equalization Dept. of Property Taxes Assessment Standards Division Verne Walton, Chief 1719 24th St. (P. O. Box 942879) Sacremento, California 94279-0001 (916) 445-4982 Colorado Division of Property Taxation 1313 Sherman St.- Room 419 Denver, Colorado 80203 (303) 866-2371 State of Connecticut Office of Policy and Management Intergovernmental Relations Divisions Donald Zimbouski 80 Washington St. Hartford, Connecticut 06106 (203) 566-8070 Director of Revenue Delaware Division of Revenue Wilmington, Delaware 19801 (302) 571-3315 Real Property: Hermon C. Ricks Acting Associate Dir. Real Property Assessment 300 Indiana Ave. NW- Room 2132 Washington, DC 20001 (202) 727-6447 Florida Dept. of Revenue Division of Ad Valorem Tax John Everton, Director Woodcrest Office Bldg. (PO Box 3000) Tallahassee, Florida 32315 (904) 488- 3338 Georgia Dept. of Revenue Property Tax Division Larry Griggers, Dir. 405 Trinity- Washington Bldg. Atlanta, Georgia 30334 (404) 656-4240 Hawaii The state has no responsibility for property. Administrative responsibility for taxation of property is at the county level. State of Idaho Dept. of Revenue and Taxation State Tax Commission Real and Personal Property Bureau 700 W. State St. (PO Box 36) Boise, Idaho 83722 (208) 334-7733 Illinois Property Tax Appeal Board 404 Statton Bldg. PO Box 19278 Springfield, Illinois 62794-9278 (217) 782-6076 State of Indiana State Board of Tax Commissioners State Office Bldg.- Room 201 Indianapolis, Indiana 46204 (317) 232-3761 Iowa Department of Revenue and Finance Local Government Services Division Hoover State Office Bldg. Des Moines, Iowa 50319 (515) 281-4040 Kansas Department of Revenue Division of Property Valuation David C. Cunningham, Director 526-S Robert B. Docking State Office Building Topeka, Kansas 66612-1585 (913) 296-2365 Commonwealth of Kentucky Department of Property Tax, Revenue Cabinet Billy Whitaker, Director of Real Estate 592 East Main Street Frankfort, Kentucky 40620 (502) 564-8338 Louisiana Tax Commission Property Tax Division Donald Strain, Director 923 Executive Park Avenue Suite 12 (PO Box 66788) Baton Rouge, Louisiana 70896 (504) 925-7830 State Tax Assessor Property Tax Division Bureau of Taxation Augusta, Maine 04330 (207) 289-2011 State Department of Assessment and Taxation Lloyd W. Jones, Director 301 West Preston Street Baltimore Maryland 21201 (301) 225-1184 Commonwealth of Massachusetts Department of Revenue Division of Local Services Harry M. Grossman, Chief Property Tax Bureau 200 Portland Street Boston, Massachusetts 02114-1715 (617) 727-2300 State of Michigan Department of Treasury State Tax Commission John Person, Director Property Programs 4th Floor- Treasury Building Lansing, Michigan 48922 (517) 373-0500 State of Minnesota Department of Revenue Michael P. Wandmacher, Director Local Government Services Division Mail Station 3340 St. Paul, Minnesota 55146-3340 (612) 296-2286 Robert M. Megginson, Director Property Tax Bureau Mississippi State Tax Commission PO Box 960 Jackson, Mississippi 39205-0960 (601) 359-1076 State Tax Commission of Missouri Rose Kaiser, Administrative Secretary 621 East Capitol Avenue PO Box 146 Jefferson City, Missouri 65102-0146 (314) 751-2414 State of Nebraska, Department of Revenue Larry D. Worth, CAE- Administrator Property Tax Division PO Box 94818 Lincoln, Nebraska 68509 (402) 471-5960 Nevada Department of Taxation Division of Assessment Standards John P. Comeaux, Director Capitol Complex 1340 S. Curry Street Carson City, Nevada 89710-0003 Richard M Young, Director Property Appraisal Division State of New Hampshire Department of Revenue Administration 61 South Spring Street PO Box 456 Concord, New Hampshire 03301 (603) 271-2191 State of New Jersey Division of Taxation Department of the Treasury Appraisal Section John R. Baldwin, Director 50 Barrack Street Trenton, New Jersey 08646 (609) 292 7974 State of New Mexico Taxation and Revenue Department Property Tax Division PO Box 630 Santa Fe, New Mexico 87509-0630 (505) 827-0700 State of New York Executive Department Division of Equalization and Assessment Robert L. Beebe 16 Sheridan Avenue Albany, New York 12210-2714 (518) 474-8821 North Carolina Department of Revenue Property Tax Frank S. Goodrum, Director PO Box 871 Raleigh, North Carolina 27602 (919) 733- 7711 State of North Dakota Office of State Tax Commissioner Charles S. Krueger Deputy State Supervisor of Assessments State Capital Bismarck, North Dakota 58505 (701) 224- 3127 State of Ohio Department of Taxation David Stone, Assistant Administrator Tax Equalization Tax Division State Office Tower PO Box 530 Columbus, Ohio 43266-0030 (614) 466-5744 Oklahoma Tax Commission Ad Valorem Tax Division Robert L. Hartman, Director M.C. Connors Building 2501 N. Lincoln Boulevard Oklahoma City, Oklahoma 73194 (405) 521- 3178 Oregon Department of Revenue Property Tax Division George Weber, Administrator Revenue Building 955 Center Street, N.E. Salem, Oregon 97310 (503) 378-3022 Pennsylvania The Commonwealth of Pennsylvania has no power over the local or county assessment or collection of taxes on real property. The Commonwealth does not get involved except through the court system when a taxpayer pursues relief through the courts for an alleged overassessment. Mr. Charles Munsch Supervisor of Tax Equalization Department of Administration 275 Westminster Mall Providence, Rhode Island 02903 (401) 277- 2885 South Carolina Tax Commission Property Division James L. Brodie, Director PO Box 125 Columbia, South Carolina 29214 (803) 737- 4485 South Dakota Department of Revenue Division of Property Taxes Linda Osberg, Director 700 Governors Drive Pierre South Dakota 57501-2276 (605) 773- 3311
Division of Property Assessment Tom Fleming, Director 505 Beaderick Suite 1400 Nashville, Tennessee 37243 (615) 741- 2837 State Board of Equalization Kelsie Jones, Executive Secretary 505 Beaderick, Suite 1600 Nashville, Tennessee 37243 (615) 741- 4883 The State of Texas State Property Tax Board Leon Willhite, Director 4301 W. Bank Dr. Suite 210 Austin, Texas 78746-6565 (512) 329- 7901 Utah State Tax Commission Property Tax Division Mike Monson, Director Herbert M. Wells Building 160 East 300 South Salt Lake City, Utah 84134 (801) 530- 6297 State of Vermont Department of Taxes Division of Property Valuation and Review 43 Randall Street Waterbury Vermont 05676 (802) 241- 3500 State of Virginia Department of Taxation Property Tax Division Otho C.W. Fraher, Director PO Box 6-L Richmond, Virginia 23282 (804) 367- 8020
State of Washington Department of Revenue Property Tax Division Will Rice, Director General Administration Building Olympia, Washington 98504-0090 (206) 753- 5503 State of West Virginia Department of Tax and Revenue Property Tax Division PO Box 2389 Charleston, West Virginia 25328 (304) 348- 3940 State of Wisconsin Department of Revenue Bureau of Property Tax Glenn Holmes, Director PO Box 8933 Madison, Wisconsin 53708 (608) 266- 1187 State of Wyoming Department of Revenue and Taxation Ad Valorem Tax Division 122 West 25th Street Cheyenne, Wyoming 82002 (307) 777- 7215
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