Residential Property Tax Appeal Services

Residential property taxes are the largest tax expense for many homeowners. Tax assessors for the county or city typically generate a guesstimate of market value for each home. Tax assessors use the least reliable method of valuation, the cost approach, to value homes for property taxes. Assessors use the cost approach due to limited staff and time to generate many thousands of values in a period of a few months. Since the assessor’s values are not reliable, they are subject to negotiation.

How Property Taxes are Calculated

Residential property taxes, and other property taxes, are calculated based on the tax assessor’s guesstimate of market value, as well as the tax rate, exemptions, and the assessment ratio. There are a variety of nuances that vary by city, county, and by state. Most tax jurisdictions have preferential treatment for owner-occupied homes, termed homesteads. Following is a summary of each factor in property taxes:

• Market value – the actual value of your home or other real property.
• Exemption – many tax entities allow either a fixed amount (say $30,000) or a percentage of the assessor’s estimate of market value (say 20%) to be deducted for homesteads.
• Assessment ratio – most states have a 100% assessment ratio. Some states have different assessment ratios for different types of property. For example 10% of the assessor’s value for homesteads and 30% for commercial.
• Assessed value – tax assessor’s estimate of the market value of your property adjusted for both the assessment ratio (if applicable) and the homestead exemption.
• Tax rate – the portion of the property’s assessed value charged as taxes annually.

Property taxes = (Assessor’s value x assessment ratio – exemptions) x tax rate

Start by Checking Your Valuation

Check the assessor’s estimate of the market value of your property. Then compare the assessor’s value to:

• Comparable sales to determine if the assessor’s value exceeds market value, and
• The assessed value for similar properties to determine if your assessment is equitable.

Most states allow annual property tax appeals on both excessive value (assessor’s value over market value) and unequal appraisal (your assessment is high compared to neighbor’s property).

How to Apply for Your Property Tax Reduction

You have a right to appeal annually in most states. YOU can spend your money better than the government. The assessor’s values are not reliable.

Property taxes exceed federal income taxes for about half the homeowners in the U.S. Property taxes for your home or rental property can be negotiated, unlike federal income taxes.

Research the property tax protest deadline for your state, county, or township. Some states have a uniform protest deadline. In Texas, the deadline is May 15th or 30 days after the notice of value is mailed, whichever is later. Many states allow the county or township to establish the protest deadline.

File a property tax appeal annually. Yes, every year. Remember, the assessor’s values are not reliable. Further, about two-thirds of appeals are successful. It is your right to appeal and negotiate a reasonable value with the tax assessor based on comparable sales and assessment comparables.