Can I Challenge My Property Taxes?

Property taxes help state, county, and local governments pay for important projects. A tax assessor evaluates the value of your property and then taxes you based on that assessment. This doesn’t mean you have to settle for paying that amount. Many homeowners feel they’ve been billed incorrectly. Fortunately, property tax laws often give taxpayers the right to challenge the assessment in court.

This article provides an overview of property tax, how it’s determined, and assessment appeals. Property taxes depend on local and state laws and procedures. A local tax attorney will be in the best position to help you. 

The Basics: How Do Property Taxes Work?

Property tax assessments are typically calculated using a formula that determines the valuation according to a property’s value and a specified tax rate. 

For example, different counties in Virginia impose property taxes on real estate, personal property like vehicles, and machinery. Each county gets to set its own percentage rates for each type of property. Counties calculate taxpayer bills by multiplying the county rate by the total value of the property. In other words, a piece of personal property taxed at a 5% rate worth $100,000 would generate a tax bill of $5,000.

The Role of Assessments in Determining Your Property’s Value

During property assessments, professionals judge the value of your property. They typically use one of the following strategies to determine the current value:

• Income approach: An assessor looks at how much income a property could produce if you rented it out. These calculations also account for operating, financing, insurance, and maintenance costs.
• Cost approach: Assessors decide how much it would cost to replace the property with something similar. This takes into account costs like labor, land value, materials, and utility access.
• Market approach: Values unoccupied, residential, and agricultural properties based on the recent sale prices of similar properties.

These methods allow county assessors to decide the fair market value of your property. Different municipalities also get to determine an equalization rate. This is the percentage of the fair market value that actually gets used to determine your property tax. 

For example, your home is worth $100,000. If it’s located in a town with a 50% equalization rate, the property tax will have a final assessed value of $50,000, and you will pay taxes on that amount.

Assessments occur according to local tax calendars. After completing these appraisals, the assessor’s office will send assessment notices to you and other property owners. This lets you know important details about your property, assessment methods, and value.

Other Important Property Tax Factors

States and counties have their own laws that affect personal property tax bills. For instance, active duty military personnel and their spouses in some jurisdictions are exempt from personal property tax if they’re legal residents of other states. Other locations also offer prorated taxes on personal property. So if you sell a piece of taxable personal property part way through the year, you only have to pay taxes for the time those items were in the state.

In other states, damage to a home worth a certain amount caused by natural disasters like earthquakes, fires, and floods may result in property tax relief.

Getting a Reassessment if Your Property Taxes Are Too High

Many factors influence the computation of property taxes. Property owners who think there are valuation problems have several different options, including appealing the decision.

For instance, you may qualify for one of the exemptions mentioned above. An assessor who calculates property tax without knowing you qualify might produce an incorrect bill. From there, you can file an appeal form. 

Appeal procedures vary by state or county. For example, people in Lake County, California, can request reassessments between April 1 and November 30. These taxpayers may submit their own opinion on the value of their property and evidence supporting their claim, including assessments on comparable properties. 

Other possible reasons to appeal and assessment include:

• Your property was valued based on wrong information, like an incorrect lot size or inaccurate feature descriptions
• A failure to use the correct equalization rate
• Your property was compared to properties that aren’t comparable, such as homes with different features

You can try to appeal or dispute your bill if you follow local regulations. However, it’s important to understand that the appeals process is complex. Tax boards also limit how long people you to file a challenge after getting your assessment. Many also charge fees for appeals and reviews.

Get a Tax Lawyer’s Help

Although tax appeals can’t lower tax rates, they can help reduce your final tax bill. Before getting started, it’s wise to understand how the process works and what goes into filing.

If you want legal advice for a property tax appeal, contact a local and experienced tax lawyer for guidance.