Your Property Tax Value

Property taxes are what funds most of the municipal services that you enjoy every day.  Things like schools, trash service, sewer, road maintenance, police, and fire departments are all funded, at least in part, by property taxes.  Property tax value is determined by the municipality or county that you live in.  Once they have determined the property tax value of your property, then they will multiply that amount by the current tax rate to arrive at your property tax amount.  Various credits, such as homestead credits or energy efficiency credits, will be subtracted from the tax due if they apply in your location.

How Is Property Tax Value Determined?

The predominant factor in determining the property tax value of any given piece of property is the current fair market value of the property.  The tax assessor will compare your property to what other similar properties are selling for in your area.  This will be considered the market value of the property, or the amount one person is willing to pay for that property under normal circumstances.

Another important factor in determining your property tax value will often be how the property is used.  Most, if not all, municipalities will charge a higher tax rate for commercial use property over residential property.  That is because they also take into account any revenue that will be realized by the use of the property, and this can raise the property tax value.

What If I Disagree With My Property Tax Value?

If you disagree with the property tax value assessed by the town, you may begin a process known as a tax grievance.  This is an appeal-type process that challenges the town's assessment.  Generally, you will have a set time in which to file a tax grievance once receiving your tax assessment.  When you do file a grievance, you must have some sort of documentation of why you are challenging their views, if you are to have a chance to get your property tax value reassessed. 

There can definitely be errors in an assessment, as they are usually only done every few years, instead of annually.  If you have noticed the real estate market in your area dropping, then that is a good time to challenge the town's tax assessment.  Quite often, municipalities hold off doing new valuations in times of market drops because they need the revenue to cover the budget for the year.

One thing you can do is to hire a private property tax assessor to do an objective review and see what figures they come up with.  If it's significantly lower than the current town property tax value, this may enable you to get them to change your property tax.  You can also obtain proof of comparable sales in the last 1 to 1 ½ years for your area.  These will need to be very similar to your home in age, square footage, area, lot size, and in the same condition as your property in order to be effective.

Above all, if you really feel you have been overvalued, you definitely should file a tax grievance.  Statistics show that as many as 60% of homeowners are overvalued and pay too much in property taxes, but very few go through the effort of fighting the town's assessment.  Before filing, ask your tax assessor's office what they use to determine the property tax value, as this can vary from town to town.  Once you know what evidence they count, you can do your own research in that area.

How To Reduce Property Tax Value

Knowing exactly what the assessor included while determining your property tax value can help you tremendously.  Since most assessments are done from the street, without the assessor ever entering your home, much of the assessment will be guesswork.  There are often errors in number of rooms, number of bathrooms, and other details that add to a home's value.

Ask the assessor's office to see the assessments for other homes in your neighborhood that are of a comparable age, size, and condition.  This is public information, but the assessor's office will rarely tell you this.  They are allowed to make you follow a process in order to access this information, however.  For example, you may have to pay a copying fee or fill out a form before being able to see the other assessments.

Don't delay when you receive an assessment that you feel is unreasonable.  Many towns will allow a certain window of time, such as within 60 days, for filing an appeal, while others only hear tax grievances during a certain time.  You should call right away and find out what the process is in your town.  You will also need time to gather all the documentation you will need in order to fight the assessment.

Usually, a tax assessor will adjust an obvious mistake without having to go through the whole tax grievance process.  If that is the basis for your disagreement, you will usually only need to point out the error and show why it is incorrect in order to get the property tax value to the correct number.  This is a very common reason for inaccurate tax evaluations, so all homeowners should carefully read the entire property tax assessment paperwork.

Talk to your neighbors.  You may find that many of them are going through the same thing.  Together, your voices may be heard faster than individually.  You then have more of an impact than any one person does, and the town may be more willing to work with you.




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