First Person: Fighting High Property Taxes

If you are a homeowner, you have probably received, or will soon receive, your property tax bill for the year. In a majority of cases those property taxes will be higher than the year prior, even if the actual value of your home did not go up. These higher property taxes are also not keeping up with inflation; during this past decade, property tax rates grew at more than twice the rate of inflation.

In the state of Wisconsin, which is already known to have high property taxes, my home was assessed at a lower value than that of the year prior, or a difference of about $4,000. Through a counter intuitive measure, the property taxes that I now owe on my home have actually increased by $170.

What gives?

In many cases, higher property taxes are a result of incorrect home value assessments, outdated property values, or a generalization of a home's expected (but not actual) amenities and neighborhood advantages. The National Taxpayers Union calculates that assessors overvalue at least 30 - 60% of properties. Meanwhile, fewer than 5% of all homeowners actually appeal their overinflated assessments (1). This means that many of the homeowners who appeal their property assessments stand a good chance at seeing their taxes lowered.

In order to start the process of appeal, first do some research. Start by looking at your home's assessed value and compare that number to the recent sales of similar homes in the area. If you're still confused, call the assessor's office and ask what formula (or formulas) is (are) being used to calculate your home's value, as well as what is the local tax rate. Be sure to have the information on your home's property tax identification number, square footage, and number of bathrooms handy.

Next, take a look at your home's blueprints and sale documents and compare the numbers posted with those on the assessment. Make sure your home's square footage matches what is reported on the assessment, as well as obvious items such as the number of bedrooms. If you have made any major changes to the house which would lower its value (e.g., tearing down a garage), make sure that this is noted in the assessment.

If all the numbers match up, it is time to start looking at neighboring houses and at what values they are being assessed. In some cases, this information is readily available on a city's web site. In other cases, you will need to visit the assessor's office in order to obtain comparable property values. If you know a real estate agent, he or she may be able to research recent home sale prices. In order to build your case, you will need to research 5 to 10 comparable homes in your area. In a majority of cities, those homes will need to be sold for at least 10% less than your own home's assessed value in order to be considered in the appeal.

Once you have your data in hand, file the appeal with the county board. Typically, this will have to be done in the 60 days between when you receive your property tax bill and when it is due. Other jurisdictions allow up to 120 days, while others only allow 30 days. Protest deadlines are strict and do not offer any grace periods. In order to insure that your appeal is received (and to show proof of delivery), use certified mail.

Once the appeal is received, a date is set for a panel hearing. In most cases, the panel hearing occurs within weeks of the appeal receipt. In other cases, you may be waiting for several months until a slot becomes available.

While you are waiting, sit in on a few appeals cases and see what common objections are brought up by the board's members. This knowledge will help you better prepare your own case. On the day of your panel appearance, bring as much supporting documentation as possible, including pictures and descriptions of the comparable properties. Try to be courteous and do not insult the assessor; in most cases, you will receive at least some reduction of your property taxes.

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