Investors Lounge Online

 Nobody likes to pay property taxes.  Especially, when property taxes rise, as the value of houses decrease, it can send even the calmest homeowners' blood pressure through the roof. More and more homeowners believe this is solely caused by the recent foreclosure fiasco. To them, if their house isn't increasing in value, the amount of their property taxes should be reflected in a lower tax bill as well.

In a perfect world it would. But nothing is perfect, so a better idea is to take a closer look at the real culprit. The truth is that property-tax assessments that are years behind the real-estate market.

In many areas, the value of houses is usually based on sales prices and a physical review of the property. On average these valuations are performed every few years, but often not that frequently. Because of this inept procedure the most recent changes in home prices are out of proportion with property taxes.

Sometimes even where assessments are done on a yearly basis, there is a higher than normal feeling of dissatisfaction on homeowners part, if their property taxes seem out of proportion with the value of their house, or the houses in the area.

However, many homeowners are unaware of the discrepancy between belated assessments and property taxes. Thus, it's not difficult to see why blame is placed on the collapse of mortgage giants, like Fannie Mae and Freddie Mac, especially since people are paying more taxes on an asset that is sinking in value.

To their credit, some states have taken to offering limited relief with property taxes, to appease the growing concern of disgruntled homeowners who feel like their being forced to foot the bill for other people's mistakes.

But what's a property owner to do to combat rising property taxes that don't reflect the actual value of their house?

The first thing to do is understand that rising property taxes aren't all that new, but there are ways to bring your property taxes down.

A homeowner can appeal a property tax assessment. It isn't too difficult and usually the costs of a lawyer need not be part of the equation. For instance, almost 90% of assessment disputes are settled by talking with the tax assessor's office. Most never reach the point of a formal appeal process.

That sounds too easy. Well, it is and it isn't. But first, let's look at some of the rules and reasons the tax collector justify raising property taxes.

An over-inflated tax bill can be justified by homes that have trouble being sold right away. Another justification for upping property taxes is too many houses for sale in the surrounding area.

Also, in order to not lose too much money, some communities only allow 30 to 60 days for homeowners to challenge a property valuation assessment. Most can only be done annually, but if you miss the deadline, you'll have to wait until the next year. So, yes, you can re-appeal or request a reassessment but it's better to come armed with justifiable reasons of your own, so you don't have to wait until the next year.

When appealing an assessment, a wise homeowner needs to come up with a realistically fair price, not just what they think is fair. A local real-estate agent can give an estimate of a home's assessed value and comparable homes in the area.

A homeowner needs to provide evidence to support their challenge. Documents showing the actual sales prices of nearby homes are considered proof. However, they must coincide with the time of the assessment.

Since the passage of the "right-to-know" law, property-tax records are public. If a homeowner does their homework, they can easily find out how other homes are valued. But comparing neighboring homes are not alone in assessing the value of a house.

Providing clear photographs and a detailed description are crucial to assessing property taxes. Blurred photos and improper descriptions can derail your efforts. Thus, while the look of the exterior of a house is important, it doesn't tell the whole story.

For instance, a house with three bathrooms raises the property value and the property tax. New York's WNBC noted that sometimes an assessor who is in hurry and trying to cut their time and costs, might mistake three vent stacks on the roof as belong to three bathrooms. But a closer look (via your clear photos) will provide evidence that one of those vents belongs to an upstairs laundry area.

The exterior and interior architecture and design can make a huge difference in your property taxes too. A 1960's aluminum sided house, with all original kitchen and bathroom fixtures and plumbing, will not have the same value as a newer brick and stone house with modern state of the art fixtures and plumbing.

Again your photos (along with receipts) will supply the evidence, if there is any doubt.

Be sure to make sure the assessor makes a worksheet and check list to note all comparisons made between your property and neighboring properties. Ask for a copy of theirs or make one yourself. Any remodeling, floor plans, square footage, lot size, and location all play into a correct and reliable assessment.

Also, note if a house is next to railroad tracks, or whether it's on a double or corner lot, will make a difference in value and property taxes.

Be cautious with your proof, as this can be a double edges sword, and you could end up with the house being undervalued. So, you may not want to let it be known that you had a new roof, added a new deck, or other addition to the house, it will make a difference in your property tax. The same goes for adding or remodeling an existing garage, as well as any changes or improvements with landscaping.

But a comparison of other properties close by make a huge difference to even if you your own property. Homes that are in disrepair lower your property's value. Make sure you add those to your arsenal when petitioning for lower property taxes.

The best advice for homeowners who want to have their property taxes lowered is to leave no stone unturned, and if you disagree, don't just accept what an assessor says. Go to the tax office and get a copy of your property card and make sure there are no errors. The property card will list all of the basic details of your property.

Penultimately, some assessors get cranky and defensive if you disagree, but ultimately theirs just an opinion. If your evidence can proof them wrong, don't be afraid to state it. Remember, if an assessment fails, appeal, appeal, appeal. You might have to wait for your case to be heard, but if you can get your property taxes lower even a few hundred dollars, it's still worth the effort.