Filing a Property Tax Appeal: What You Need To Know

Sometimes, the Assessor gets it wrong. Property values are increasing across the country, and the resulting tax bill could be shocking, depending on where your investments are. To save money, landlords dispute the Assessor’s property valuation via a property tax appeal.

Appeals seem counterintuitive because investors generally like to see their investments appreciate in value. But, high property values result in high tax bills. So how can you save money?

You can save money by understanding why landlords and investors protest, how to appeal your taxes (and when not to), and how using web-based software expedites the process. But first, let’s quickly brush up on how Assessors calculate the amount you owe.

How Property Taxes Are Calculated

Property tax calculation is a relatively simple formula. To calculate it, Assessors first find the actual value of your property. They find this number by evaluating comparative data that shows cost, recent sales, and property income information.

Then, Assessors subtract any adjustments. Many local governments passed legislation to lower property taxes by subtracting an agreed-upon value from the property’s actual value. In Colorado, for instance, the state passed temporary relief measures that subtract $55,000 from property valuations.

With that in mind, let’s take a look at the formula.
\(\text{Actual Value} – \text{Value Adjustment} \times \text{Assessment Rate} = \text{Assessed Value}\)

Then,
\(\text{Assessed Value} \times \text{Mill Levy} = \text{Taxes Due}\)

The mill levy is just another way of saying the tax rate. This formula shows that the value of your property directly impacts the amount of taxes you’ll pay. In short, lowering the valuation lowers your tax burden.

Reasons to Protest Property Taxes

Nobody wants to pay more than they should — that’s the biggest reason to appeal property taxes. But just because you don’t want to pay more money than you have to isn’t a good enough reason to file a protest.

Note that depending on where you live, the first step to an appeal could be called a protest. Or, the entire process can be called an appeal. Semantics aside, let’s examine some of the most common reasons landlords and investors appeal.

1. Overvaluation: If you believe the Assessor overvalued your property, you may want to appeal your property taxes. Overvaluations can happen for many reasons, including rapid market changes and inadequate property inspections.
2. Comparable Property Values: If you find that properties similar to yours were assessed at a lower value than yours, you could argue that there’s inconsistency in the assessment process.
3. Inaccurate Property Information: County Assessors don’t know your property as well as you do. Sometimes, valuations include the wrong square footage, an incorrect number of bedrooms or bathrooms, or an inaccurate assessment of the property’s condition. These are all valid reasons for an appeal.
4. Economic Downturn: During a recession or if the real estate market in your area has depreciated, perhaps in the case of a natural disaster, the assessed value of your property may no longer align with its actual market value, justifying a protest.
5. Double Assessment: Mistakes happen. Sometimes, the Assessor’s office sends two tax bills to a single person. If you go by DJ, but your name is Derek Joseph, you could end up with two tax valuations in your mailbox.
6. Calculation Mistakes: If you find a calculation error — perhaps the Assessor mistakenly used an incorrect tax rate — you’ll want to file a protest.

If you have reason to believe that county Assessors placed too high of a value on your property, you’ll want to exercise your right to an appeal. Let’s examine the process to gain further understaning.

The Appeal Process

At this point, understand that the appeal process varies by location. The process for counties in Texas will differ from those in New York. That said, a number of similarities apply no matter your property’s location.

The following guideline serves to help you illuminate the process.

1. Assessment Notification: The first part of the process starts with a Notice of Valuation (NOV) in your mailbox. Note that the valuation could be called something different in your state. Here, you’ll see the value the Assessor placed on your property. These NOVs often include filing deadlines, and some include instructions for how to appeal the valuation.
2. Review Deadlines: Make sure you completely understand the appeal deadlines. If you miss the deadline, even by a day, you’ll probably forfeit the right to appeal.
3. Gather Evidence: To prepare for the appeal, you’ll need to gather as much evidence as possible. You could get a property appraisal, compare comparable property sales, highlight calculation mistakes, or refute valuations with incorrect property information.
4. File the Appeal: Property owners must formally appeal with the appropriate local authority. Appeal forms can be found on county Assessor websites. That Assessor could be a specialized tax appeals board or a specific county Assessor. Depending on the county, you might be able to file appeals by email, mail, drop box, fax, online, or in person at the Assessor’s office.
5. Review Hearing: In some cases, you’ll have the opportunity to present your case to the review board or hearing officer. If your county grants you a hearing, be concise when presenting your details and avoid getting into lengthy arguments about taxes. These hearings are often brief, so don’t waste time.
6. Notice of Determination Mailing: If your county doesn’t conduct in-person hearings, you’ll likely receive a Notice of Determination (NOD). This document tells you whether the Assessor agrees with your rationale for why your property is overvalued. If the Assessor disagrees, it’s not over.
7. Further Appeals: Depending on where you live, you’ll have a few options. You could go to the state appeals board or work with an arbitrator. Deadlines often occur in September.

When to Not Appeal

Just because you can appeal your property taxes doesn’t mean you should. If you’ve received a valuation that appears low, don’t rush out to correct the Assessor unless you want to pay more. Here are other examples of times to lay low and pay what you owe.

1. Lack of Evidence: A successful appeal hinges on proving that your property’s assessed value is too high. The appeal will likely lose without the evidence to contend  the valuation.
2. Minor Increases: If the increase in assessed value and subsequent property taxes is minimal, the time it takes to appeal the valuation might not be worth it.
3. Jurisdiction Approval Process: In areas where obtaining an appeal may be complex or extremely difficult, it might not be worth it to do it yourself. In these cases, you can use property tax appeal software from our partner Ownwell to offload difficult appeal situations to the pros.
4. Square Footage Increases: If you’ve made major renovations to your property, especially in terms of square footage expansions, it’ll benefit you not to alert the Assessor to these changes.

TurboTenant Resources for Property Tax Appeals

Appeals don’t have to be complicated. Generally, successful appeals require landlords and property owners to compile a significant number of details, including comparable property values, specific deadline dates, location-specific appeal details, and more.

Even if you only have a property or two, appeal deadlines arrive quickly — sometimes in as little as 30 to 45 days. As your number of properties increases, these deadlines become even more challenging to manage. And if you have out-of-state properties, you’ll have to become an expert juggler.

But when you utilize software like Ownwell, you can offload the work to a company specializing in property tax appeals. The best part? It’s easy. Start by simply adding your address, and the Ownwell team will go to work on your behalf. Plus, you only pay when you win.

Case Studies: Successful Appeals

It’s understandable to have doubts when offloading such a vital facet of saving money to a third party — we get it. To set your mind at ease, Ownwell has successfully appealed several high valuations and saved their clients thousands. Let’s look at three examples.

Home Assessed Above Sale Price

It may seem implausible, but sometimes a property is assessed higher than its sale price. In one such case, Ownwell saved a Washington man $1,830 one year. See how they did it here.

Florida Woman Stays Put

When a woman moved to Florida to enjoy her retirement, increasing home prices nearly forced her to move. But when she simply input her address into Ownwell’s website, she saw the potential to save $1,100. Learn how she ended up saving even more than that.

$12,000+ Tax Savings

When a real estate investor noticed his assessed values kept climbing despite vacancies and changing public health mandates, he contacted Ownwell. Read on to see how they reduced the $8.8M assessment to $7.4M for a 16.3% reduction.

How to Increase Your Chances of a Successful Appeal

To successfully appeal your property taxes, leveraging a comprehensive game plan can make the difference between saving money or getting denied. Here are seven steps to give yourself the best chance of winning your appeal.

1. Review the Assessment: Carefully review your mailed assessment to see how your current valuation compares to the previous evaluation. Don’t get flustered if it seems too high, you have options.
2. Gather Information: The best way to improve your chances of winning an appeal is with evidence that points to pricing discrepancies. If you can pool a significant number of homes that sold for less than your valuation, you’ll have a better chance of winning.
3. Understand Local Procedures: Every county has differences in the tax appeal process. Those differences can be as substantial as the deadline date or the methods by which owners can submit. Or, they can be as simple as what the forms are called. Understanding local procedures in depth gives you a better chance of winning an appeal.
4. Prepare a Well-Structured Appeal: Landlords should present a well-structured appeal that clearly outlines the grounds for the protest and provides supporting documentation.
5. Monitor the Progress of the Appeal: Throughout the process, landlords who stay up to date on the progress of their appeal, respond to any requests for additional information, and attend any scheduled meetings or hearings give themselves a solid opportunity to save money.
6. Consider Multiple Levels of Appeal: Depending on the outcome of the initial appeal, landlords may have the option to pursue further action through additional administrative or legal challenges.
7. Consider Ownwell: Depending on how much work you’ll have to put in to prove your property is worth less than its valuation and whether or not you’ll need to file multiple appeals, it makes sense to consider professional assistance. Using property tax appeal software can save you money while helping you regain time.

Conclusion

Understanding the property tax appeal process is vital for landlords and property owners seeking to lower their tax burden. You must understand assessment review, evidence collection, and local procedures to maximize your chances of winning.

The complexity of the process may force you to consider professional assistance. For example, employing software, like Ownwell, can streamline the process, especially when dealing with multiple properties or intricate jurisdictional requirements.

Ultimately, an informed and structured approach, combined with thoughtful decision-making, can significantly enhance the likelihood of achieving successful results, culminating in potential savings and a more accurate valuation of property assets.

Also, consider signing up for a free TurboTenant account to save even more time and money. With TurboTenant, you can streamline rent collection, tenant screening, and more.

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