Countdown to Financial Fitness: Appealing Your Property Taxes

Countdown to Financial Fitness: Appealing Your Property Taxes: We just received our property tax assessment and, like many of our neighbors, we're in shock. I'm reminded of a cartoon illustrati...

Appealing Your Property Taxes

We just received our property tax assessment and, like many of our neighbors, we're in shock. I'm reminded of a cartoon illustrating how a house is viewed through different eyes: You see your house as you know it. The real estate appraiser sees a dilapidated shack. The tax assessor sees a palace.

Our county tax assessor thinks we live in a palace.

I used to not pay much attention to the assessment statement, which arrives each spring. I didn't really know what my house was worth—or care that much—since I wasn't getting ready to put it on the market. The figure the tax assessor provided was merely informational.

The tax bill arrives in the fall, but by then it's too late to appeal. Property owners have 45 days from the date of the assessment to protest the valuation that will be used to calculate the tax bill.

About three years ago, when the real estate market started to recover, our property assessment shot way up. I finally paid attention, and then I found out it's not that hard to appeal. There are companies that charge to file an appeal on your behalf, but the process is simple enough to do yourself and save that fee.

In Georgia, you can print a one-page Appeal of Assessment form, found online at https://dor.georgia.gov/documents/pt-311a-appeal-assessment-form. Fill in your contact information; the rest of the data can be found on your property assessment form. Start with an appeal to the Board of Equalization, the box for which there is no charge.

Under "Property Owner Comments" I write "see attached." Then I prepare a one-page narrative about why my property is worth less than the assessment.

Start with a visit to an online real estate site like Zillow and type in your address. (It's creepy how much information they have about your house.) Zillow will give you a "zestimate" of what your home is worth, i.e., a suggested asking price if you were to list it for sale. If Zillow's estimate is less than what the tax assessor says your property is worth, include it in your narrative.

Then, most importantly, look at comparable sales in your zip code. (Don't worry about homes still on the market; what matters is how much a buyer will actually pay.) Preferably the sales should have been closed within the last six months, but go back further if there hasn't been much activity. Include sales of nearby homes in similar neighborhoods, with similar square footage and similar amenities.

If you use a "comp" for a more expensive home, be sure to point out why that home is worth more than yours. Perhaps it has an extra bedroom or bathroom, a pool, or has more square footage. Maybe the lot is larger or the location is more desirable.

I also note that many of my "comp" properties have had recent renovations, such as a new kitchen, deck, or professional landscaping, whereas my house still has original flooring and appliances. (If you have done a major remodel recently, there's no need to call attention to it in your narrative—just leave this part out.) Remember the cartoon; you're drawing the picture the real estate appraiser sees (the dilapidated shack).

If the "zestimate" and a handful of recent sales of comparable homes in your area are lower than your assessment, you have a good chance of winning your appeal. I've been successful two years in a row, and I'm hoping the results of my 2019 appeal will also be successful.

In our experience for the past two years, when the property tax bill arrives in the fall, it is for approximately 85% of the total amount the county thinks we owe, and it's noted: "under appeal." Then in January, an assessor comes to look at the property (outside only) and make a final determination.

The first year we appealed, we received an additional refund from the county after the assessor's visit. Last year, we received a small bill after the appeal was finalized, but that amount plus the original 85% added up to less than we would have had to pay had we not appealed.

With just a little effort, you could save hundreds of dollars!

Have you ever thought about appealing your property taxes? I'd love to hear your comments.

Sharon Marchisello is the author of Live Well, Grow Wealth.