Property Tax Experts
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For taxpayers who
may be experiencing
difficulty in paying
their property taxes,
there may be help.  
Most cities in the
United States have
Property Tax Poverty
Exemption Policy and
Guidelines. You may
be eligible to waive
your annual property
tax for one year
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You're most likely to get a reduction if you find a factual error in your assessment. In
that case, all you have to do is make an appointment with the assessor and bring
proof -- such as maps, photos and floor plans -- that backs up your claims. If, for
example, you show that your modest three-bedroom, one-and-a-half-bath house is
described as a stately five-bedroom, three-and-a-half-bath manse, a reduction may
be made on the spot.

Mistakes in assessments happen more often than you might think. Ron Napier, a real
estate tax appeal specialist in Oak Park, Ill., says he finds errors in at least 60% of the
cases he takes on. For instance, the assessor may have entered the age of the
house or the number of bedrooms and baths incorrectly, or overlooked something
that's sure to hurt, such as leaky plumbing or asbestos siding. Or perhaps the
assessment shows a garage that has since been demolished. Occasionally, the
assessor records information on the wrong house. The most common mistake is
measuring incorrectly (only heated and livable space should be counted). You
probably won't get an adjustment if the difference you find is trivial, but Napier, a
former assessor himself, has seen cases in which the measurements are off by as
much as 1,000 square feet. "That's almost a house in itself," he says.






Another way to get a reduction is to show that the value placed on your home is out of
whack compared with assessments received by your neighbors. This may also be a
relatively simple process if you can find at least three properties in your neighborhood
that are similar to yours but have significantly lower assessments. (Your tax
jurisdiction may publish the magic number it deems "significant," such as 15%.) Real
estate agents are usually happy to help homeowners learn the ropes because such
assistance builds goodwill. "It's not an imposition," says agent Rick Turner of Hilton
Head, S.C., who fields such requests two or three times a year. "After all, I'm in a
service industry."

The trick is to find houses that are both close by and similar to your own. Supporting
evidence, such as photos and floor plans, helps. If you can prove that your house is
actually in worse condition than the comparables -- for instance, yours has a cracked
foundation or flood damage, and your neighbor just put on a new deck and
remodeled the kitchen with all the bells and whistles -- all the better.

There are other ways to get your assessment reduced, but these can be a bit more
complicated and expensive. For instance, Lumley received an assessment of
$45,000 a few years ago on a lot he had inherited in Pelham, Mass. But the four-acre
lot was unbuildable because it sat on wetlands. Hiring a wetlands expert to prove this
cost him more than $200, but it paid off in spades -- his tax bill was knocked down to
$100 a year, roughly one-tenth of the original amount. "You have to make your case so
that any damn fool can see there's an egregious error," he says.

In building a case, it helps to know what method is being used to value your home.
Theoretically, similar houses are supposed to have equal and fair assessments,
based on current market value. Assessors can use several techniques to determine
this value, including the cost-per-square-foot method and the "income method"
(which establishes how much income the property could produce). But most common
are the "cost" approach (which estimates what it would cost to replace your house)
and the "market" approach (which looks at prices fetched by similar homes that have
sold recently).

Most homeowners find it easiest to use the market approach in their appeal, but it
doesn't hurt to ask the assessor to walk you through the steps that government
officials used to calculate the value. You may find that errors were made either in the
calculations or in the assumptions behind them. In theory, all houses are supposed
to be inspected on the same day, in the same way, by well-trained assessors. But
that just isn't how it happens in the real world. Because of Proposition 13, for
example, properties in California are reappraised every time a change in ownership
occurs or new construction takes place; otherwise, assessments can't be increased
by more than 2% a year. Many other taxing juris-dictions rely on bulk appraisals, often
done by outside companies rather than government employees, and don't bother to
inspect anything except new construction or additions. Even when properties are
inspected, the examination may be nothing more than a drive-by. There simply are not
enough trained assessors to go around, and they are often prevented from going
inside by growling, over-protective pets -- or owners.

To adjust for changes in prices between inspections, some taxing authorities use a
system called trending. This determines a neighborhood's assessments based on
current average and median sale prices. Such a system is inherently imperfect: Some
houses will always be over-assessed, and others under-assessed. Because of
trending, it's even possible for a house that recently sold below assessed value to get
an assessment increase. "No one sits around looking at individual sales," says Bill
Panaretos, chairman of the Multnomah County Board of Property Tax Appeal, in
Oregon. "It's not picked up unless an individual appeals." If you can prove your house
is currently on the market with a broker for less than its assessed value, or recently
sold for less, you have good grounds for a reduction.

Although you may need to ask, assessment numbers are public information and are
available through your assessor's office. And while you're at it, check property cards to
make sure that other homeowners in your neighborhood are being taxed consistently
for improvements, such as swimming pools and carports.
Assessors usually ignore upgrades, such as a new roof or paint job, because they're
part of routine maintenance. But what buyer isn't swayed by signs that a house has
been well maintained? When you visit homes you'll be using as comparables,
remember that houses are supposed to be assessed at market value. So anything
that shows your home has fewer upgrades and less curb appeal than comparable
houses should be documented.

Obviously, it's easier to compare apples to apples if you live in a subdivision or
condominium complex. But even owners who live in less common circumstances
have won appeals. Sean Sheridan lives in a duplex in a mostly commercial Chicago
neighborhood. When he moved there in 1998, his property-tax bill was $9,400 -- way
too high, Sheridan thought, especially because the bottom half of his building wasn't
rented or producing income. Sheridan looked up 15 comparable rent-producing
properties at the county courthouse and took pictures of five of them. Armed with
these facts, he went before a review board and got his bill slashed by more than half.
"What have you got to lose?" he asks.

As Congress faces mounting deficits and state legislators struggle with shrinking
coffers, local tax collectors have something to smile about: Rising property values can
automatically push up property-tax revenues. Property-tax bills are based on two
things: your home's assessed value and the local property-tax rate. As home values
soar across the nation -- the median price of existing homes jumped 10.1% between
the third quarter of 2002 and the same period in 2003 -- property-tax bills increase
even if tax rates don't. That's all the more reason to make sure you're not
over-assessed.

1| Look for obvious errors in the description of your house in the official records, such
as incorrect age, square footage, condition or acreage. If you find a mistake,
document it with blueprints, surveys, photographs and inspection reports.

2| Compare the assessed value of your house with the assessments on similar
homes in your neighborhood. This is public information and is available at Web sites
such as www.domania.com or at your local property tax assessor's office.

3| Ask a real estate agent or your assessor for a list of all sales within the past six
months in your neighborhood. Identify three to six homes that are similar to yours and
located near your property. Ask if any sales were the result of unusual circumstances,
such as a property exchange or a sale among relatives (assessors might throw these
comparisons out).

4| Look for differences in lot size, floor plans, view and proximity to adverse factors
(such as a noisy superhighway) that could influence value. Although only closed
sales matter when determining comparable value, visit open houses regularly in your
area so you know how they compare with yours.

5| Take a copy of your purchase contract to any hearing and, if possible, copies of
property-record cards for your house and comparable ones.

6| Take photos of your house and comparables -- and swallow your ego. You want to
show your house's warts, such as foundation cracks or a sagging deck. Conversely,
show what makes your neighbors' homes shine. But don't get carried away with
photos, or you'll bore the board.

7| Get a copy of your most recent home appraisal, which was probably done in
connection with a mortgage. If it was for a refinance, you might want to pay to have
your house appraised again. In a refinance, some appraisers have been known to
underestimate market values. Review boards know this.

8| Check for special homestead exemptions or tax reductions for the disabled, senior
citizens, veterans and low-income homeowners. Historic or energy-conserving
buildings may get a break, too. Make sure you include all the breaks you deserve.

9| Calculate and put in writing the reduction you believe you are entitled to, along with
your reasons.

10| Don't let a technicality doom your cause. Use whatever forms your jurisdiction
requires and meet all deadlines. It's also a good idea to watch the review board in
action in advance, so you get a feel for the kind of approach the members like and the
evidence they require.

Appealing an assessment is neither arduous nor intimidating, says Amherst,
Mass., real estate broker James Lumley, author of Challenge Your Taxes:
Homeowner's Guide to Reducing Your Property Taxes (John Wiley & Sons, $19.95).
Most disputes are settled not in a courtroom but in informal hearings with the
assessor. "Usually, the process is not that big a deal,"
says Lumley.
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