Many people are paying too much in property taxes, and may be eligible for a reduction or a refund. Property taxes are calculated by taking the assessed value of your home and multiplying it by the local property tax rate. But since home prices in so many areas have decreased recently, it’s possible that the assessed value of your home is now larger than its actual value – in which case you might be entitled to a tax break. So it’s worth looking carefully at your bill to see what your assessed value is, and whether it still makes sense. In some areas that are suffering from a sharp housing price decline, tax authorities are proactively reviewing valuations. Los Angeles County recently reduced its assessments of 128,000 homes, with an average tax savings of $750.
In addition to the fact that home prices have dropped in most parts of the country, there can also be mistakes in an assessment. Often, an assessor doesn’t actually inspect the property; he or she just looks at it from outside or works from a written description. There have been cases where the assessment was based on an incorrect square footage or number of bedrooms, and cases where a half-bathroom was assumed to be a full one and a screened porch was treated as a year-round living space. If your assessment is several years old, it might not take into account changes in the neighborhood or surrounding development that have affected your property and reduced its value.
How can you prove your case? One way is to hire an appraiser. Another is to find a number of comparable houses in your area and look up their assessed value, to see if your assessment is out of line. In some areas, you can discuss the issue directly with an assessor, but in other areas this isn’t allowed. In either case, you might end up have to file an appeal of your assessment. Nationwide, assessment appeals are successful and reduce property owners’ taxes between 30 and 50 percent of the time, according to the National Taxpayers Union. If you think your assessment is too high, it’s best to act quickly; there are often strict deadlines for challenging a valuation.