Did your property tax assessment come in the mail, and make you cringe? Here’s how to DIY fight property taxes, plus our own experience.
Today I want to talk about a frugal hack that can definitely increase your monthly cash flow (if you’re a homeowner…and if you’re not, then tuck this one away for future reference!).
It’s fighting your property taxes. Or more specifically, getting your local tax assessor to lower your home’s appraised value (tax appraised value, not market value), which means your property taxes will also decrease.
I DIY’d this for our household back in 2010, and this saved us approximately $612 over the past three years (without me having to fight it three times over!).
Why Your Property Taxes Go Up
It’s first smart to go over common reasons for property taxes to increase, as this would have been great information for my husband and I to understand before going into homeownership (read: we were totally surprised when we got a letter in the mail raising our home’s appraisal value by 7% shortly after buying it).
Some common reasons include:
- A Sale Establishing a New Market Value: This is the one that got us. Since we had purchased our home at a price that was far above the previous appraisal by our tax district, the tax district changed the appraisal automatically to reflect the market value (which we conveniently had set for them by agreeing to a home price).
- There is an Increase in Neighboring Property Values: Property values are determined largely by the property values of homes around yours. So if your neighbors are making significant improvements, or have sold their homes for high prices, or if there are other improvements in your area (like a new shopping center moving in), then your home may be reappraised higher by default.
- You Make Sizable Home Improvements: When you renovate your home, you apply for permits to do so (hopefully, *ahem*). A new appraisal may be triggered based on what types of renovations you will be doing or have already done.
- The Jurisdiction Needs More Money: Your property taxes are a revenue fund for state and local governments, and sometimes they decide to increase the tax simply because they need more money to fund programs.
The Argument I Used When Fighting Property Taxes for Our Home
While I won’t go into detail about the whole experience of fighting property taxes like I did here, I’d like to go over how I crafted our argument to give you an idea of a solid one.
The actual argument (I had several) that won my case is as follows:
- Yes, selling our home established a market price, which was much higher than the appraised value of the home. So raising that value makes sense. However, we established this market price with faulty information. It turns out that our home inspector missed several key issues that needed repairing on our home (I provided photographs, quotes from professionals for the repair costs, and highlighted areas on the inspector’s report showing where these items were checked off as “in good repair”). Had we known the actual condition of these items, we would have offered a lower asking price. Thus it follows that our home’s value should not have been raised as high as it was.
The result: I got our tax-appraised value decreased by 3.9%. They did not raise it again for another three years, so all together my efforts kept about $612 in our pockets.
You Don’t Have to Fight Your Own Property Taxes
While I decided to DIY our property tax fight (you can read all about that here), I found out later that you don’t have to go this route. Which could be a good thing for people who weren’t environmental investigators in their previous lives, or who don’t have the time to head on down to their local tax assessor’s office twice to plea their case.
Two alternatives include hiring a property tax consultant, who will then take a percentage of any savings won, or buying one of these reports to submit to your local tax assessor (you can use their tool to see if they think your home’s appraised value is too high or just right for free to get your feet wet).
So what do you think…is fighting your property taxes something you will do, or get someone else to do for you? If you’ve done so in the past I’d love to hear your experience in the comments below.