Blog
April 19th, 2013

Appealing Your Property Taxes Can Save You Thousands

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Below is a post by David Quilty, first appearing on our partner site the Quizzle blog at Quizzle.com:

Mortgage and down paymentProperty taxes can be appealed? Yep. And apparently a lot more of us should be looking into it, because it’s estimated that 40 percent of Americans are overpaying. How is this possible?

Well, the short version is that the property taxes asked for by local governments haven’t caught up to the housing nightmare of the last several years, where many homes have lost 20 to 40 percent of their value. Basically, people are still paying based on housing prices from 2005 and 2006, before the real estate bubble burst! Because of this, lots of people are paying hundreds or even thousands more each year in property taxes than they should.

But you can keep that money in your bank account by – you guessed it – appealing your property taxes. That may sound like a pain, but the potential rewards are worth it, so here’s the general process involved.

Track down your local assessor.

Many have websites, but you may end up having to physically go to the office because you will need hard copies of forms to appeal. The assessor’s office should also be able to provide information on properties valued similarly to yours so that you can see what they are paying in taxes. As a general rule of thumb, you probably want at least 5 examples of people with similar home values paying less than you.

Check the government’s math.

Everyone can make mistakes, even – or especially – the government, so look to make sure that things like the number of bedrooms, baths, and square feet in your property description actually reflect what’s there. You should also double check the taxation board’s math to ensure that there aren’t any discrepancies that would help you.

Wear and tear are good, but renovations are bad.

If your property needs renovations – new windows, roof repair – this can lower your property value and thus your property taxes. In contrast, if you’ve fixed anything or added on to your home, those things drive up the price. However, you can still make the argument that you shouldn’t have to pay full price if those additions weren’t habitable year-round.

Get ready to present.

You’re going to have to go in front of people and make the case to lower your property value, so rehearsing isn’t a bad idea. If you’re not good at talking to groups, it might even be wise to join Toastmasters or a similar public speaking organization.

Watch deadlines

Pretty simple — you want to make sure you file any paperwork you need to before it’s due.

Get help if you need it, but be aware of the cost.

With such substantial savings possible, people have made property tax appeal a professional business, and many of them are truly helpful at streamlining the process. The downside, however, is that a lot of them take upwards of 50 percent of your savings from that first year! You need to decide for yourself whether or not your time is worth that kind of money.

Do you know how much you are paying in property taxes, and will you be appealing this year?

Related links

10 common questions on mortgages
Are you taking advantage of HARP?
5 things every first-time homebuyer must keep in mind

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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