Property Owners vs. Tax Bills: Who Wins?
When property owners receive their final tax bills for the year in November or December; they may not agree with the amount to be paid. Although this can be frustrating, things can be done to alleviate this burden, because every state gives property owners the opportunity to challenge the amount of taxes levied upon them; but few actually take action and file a tax abatement. This is due to the fact that this right is not publicized enough, which means there are numerous tax payers continuing to unhappily pay their property taxes who are oblivious to this right of reduction.
After becoming aware that property tax reductions are possible, a taxpayer will need to know the right way to challenge their real estate taxes. The first thing to do is review the assessed value on the tax bill to see if the property is higher than your neighborhood average or if there has been large increase from the previous to current tax year. Researching how the local taxing authority evaluates real estate will help property owners understand the difference between those assessments and how the market value of a property is determined. An appraisal report is also an important tool for tax payers to understand their property’s value which can obtained by hiring an appraiser. This process may compare their real estate with other comparable properties that were recently sold in order to determine its fair market value. Certain municipalities assess properties at less than 100% which is known as using the equalization rate. For example if market value is set to be $250,000, and the equalization rate is 90%, the assessed value for real estate tax purposes would be $225,000.
If the taxpayer deems the property’s assessed value to be incorrect; a tax abatement must be filed by February 1 in Massachusetts and March 1 in New Hampshire to receive a possible reduction. Many property owners utilize professional representation such as an attorney or tax consulting firm. To appeal a property tax assessment; taxpayers must complete a formal application that will need to filed with the local taxing authority. Requesting a copy of the tax card from the municipality is the first way to review the details of the property. The tax card should include all the information used to determine property’s assessed value, which includes: lot size, square footage, bathrooms, bedrooms, finished basement, etc. If any discrepancies in this data are found, it would be grounds for filing a tax abatement.
However, it is still important to keep a few things in mind:
The appeals board or superior court can only decrease the property assessment, not the rate at which the property taxed.
Unless there are major discrepancies on the tax card, an appraiser’s services will need to be rendered in order to provide credible evidence of the property’s value.
Allobar Strategies, a property tax consulting firm that provides tax payers the expertise regarding tax abatements and property tax projections; can be the determining factor in success rate of the abatement.