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Tools To Help Homeowners Save Big In Property Taxes



July 16th, 2009

 

Kim Davidson made something good out of a bad situation. She lives in Bonita, California, a San Diego suburb hit hard by plummeting home values. Early this year, she appealed her tax assessment and the county reduced her annual tax bill by more than $1,000 to $3,500.

 

She did it all online and then walked the application to the mailbox. A month and half later, she realized that she saved all that money. Ms. Davidson is a 44 year-old account manager for a business consulting firm. She purchased her home last year and could not believe how much money she had saved.

 

Thousands of homeowners across the country are trying to make something good out of the epic real-estate crisis. About 23,000 property owners in Cuyahoga County, Ohio applied for property-tax reductions this year, up from an annual average of 1,700. Ohio, Cleveland is hit hard by rising unemployment and foreclosures. Appeals in Sacramento, California soared to 12,000 in 2008 from a mere 1800 in the previous year.

 

In Clark County, Nevada which includes Las Vegas, appeals soared to 6,000 this year from about 1,000 annually in previous years. Officials say that about three-quarters of the appeals succeeded in having their valuations lowered by 30% - 40%. Michele Shafe, assistant director of the Clark County Assessor’s office said that the county had already reduced valuations across the board for the vast majority of its residential property owners. In order to keep up with reassessments, staffers had to work overtime including Saturdays to keep up with demand for reassessments.

 

A large proportion of the appeals came from recent developments. Ms. Shafe says that there are people who were paying $400,000 for homes that are now worth $150,000.

 

According to Jacqueline Byers, director of research for the National Association of Counties in Washington D.C, many homes nationwide were last appraised before the real-estate crash and are valued (for tax-purposes) at levels higher than today’s current home prices. Since assessments are done every 3 years and if the last one was in 2007, your assessment may be based on a much higher value.

 

Homeowners who are interested in appealing can handle the process themselves. Tax-experts say that it is critical to be prepared if appearing before an appeals board. The alternative is to hire a property-tax attorney or consultant. The standard fee ranges from 25% to 50% of the amount saved for the first year. In addition, it will cost you several hundred dollars to secure the services of an appraiser.  

 

There are a good number of local and national online services that utilize automated property-valuation models to help consumers learn whether they are able to reduce their property taxes. EasyTaxFix.com and LowerMyAssessment.com are offering free initial evaluations. These online services can help assess your situation and typically ‘Show you the money’ or an estimate of how much you could be saving. An alert by Government Officials claims that scam artists have been reported to be prowling California and elsewhere peddling fake or phony property-tax reduction services. Much of their marketing efforts are done through direct mail.

 

In March 2009, Nick Osnato, a real-estate appraiser living in Egg Harbor Township, N.J. managed to approve his appeal which resulted in a reduction of $30,000 thus saving him $150 per-month in property taxes.

 

Mr. Onato looked for similar properties which were similar in size, lot and within close vicinity of his own property that had lower assessments. He estimates that home values in New Jersey have gone down between 10% - 20% from the past year. This of course is dependant on the area.

 

In order to secure a winning appeal, you will need to convince the tax assessor or an appeals board by providing enough evidence that your property assessment was based on inaccurate or outdated information. You can also try to prove that it is unfairly high if compared to other similar properties. In some regions, homeowners have only 2 weeks to file a notice of appeal after receiving their tax bill. 30 to 60 days is usually the normal average and homeowners will have to act fast once they receive their tax bill.

 

Homeowners who are 65 years and above may qualify for a special property tax reduction program which includes special exemptions. Be sure to examine property records to verify accuracy of square footage. Assessors keeps in file a property record-card of your property which contains information of your lot number, zoning category, address, sales records, land value and dimensions including important features recorded by the town appraiser. Check to see if there are any other errors of inaccuracy including descriptions of the property. For example, it may indicate a four car garage instead of a two. Also check to for significant defects of the property have been recorded. A leaky basement for example can help reduce the value of the property. Today, many municipalities provide all this information online.

 

Don’t forget to check your assessor’s calculations with respect to formulas. Some regions use full-market value, replacement value or sales price while others use a fraction of the market-value.

 

Next step is to identify 3 to 5 comparable properties and check your property against them. Be sure to make adjustments for the differences. Sales information and data are normally available through your local government or a licensed real-estate agent.

 

If you feel that your property is unfairly valued high, then you should contact your local assessor. If the property information on record is inaccurate, the local assessor can likely lower your assessment without a formal appeal. But if you are required to appeal before an equalization board, you will have to produce evidence to support your case. Additional ammunition will be beneficial such as bringing along an appraiser report (if you have one), records of comparable sales, photos, surveyor’s report and contractor estimates.

 

If you need more information on how to file for an appeal, you can get a brochure for $6.95 from the National Tax Payers Union at www.ntu.org

 

If you have recently made some improvements to your property and they were not formally recorded with your town, you may not receive a reduction but rather an increase assessment.

 

According to Robert Chambers, administrator of the Cuyahoga County Board of Revision that specializes in handling appeals in the Cleveland area, homeowners often make mistakes in not providing enough evidence about their property. He says, if you are denied, it is because of lack of evidence. Some people claim that it is a similar bungalow or ranch but they did not take into consideration of age, square footage and etc thus making the appraisal inaccurate.

 

He also mentioned to avoid using the hearing as a forum to vent your anger of high taxes.

 

 

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