Assessment of real estate can lower taxes

1. assessment may lower your real estate taxes
2. Analyze your current real estate tax

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Statistics show that more than 60% of

No lawyer is needed to challenge taxes, and there's no fee. All is needed, is that you put forth the effort.

The savings you reap can become huge over time. Not only do you cut your tax bill every year, but your savings grow each year as property taxes go up on a percentage basis in line with inflation. And by lowering your tax rate, you increase your home's resale value.

The key to cutting your tax bill is understanding how the system works. The big trap is that many people believe their home is taxed at bargain rates. That's because taxed value is typically only a percentage of market value. Thus a house with a $200,000 market value may be assessed at only $100,000, and the owner may think he's getting a bargain tax rate.

What most people don't know is that property tax is computed by multiplying assessed value by an "equalization ratio" that is determined by the state. If the ratio on a $200,000 housed assessed at $100,000 is 2.5, the owner is being taxed on a house value of $250,000 without even knowing it.

Equalization ratios are determined by the state and are applied countywide or throughout a tax district. The ratios are increased periodically to keep up with inflation and market transactions. But often the fixed ratio can easily be shown to be inappropriate for a particular property. If you can change your assessment, you can cut your tax bill.

• Analyze your current real estate tax. Call your local tax office and ask what equalization ratio is used to make the adjustment. Your tax bill may show an assessment at $100,000, but if the multiplier used is 2, then your assessment is really for $200,000. A challenge should be made if your home is actually worth less than $200,000.
• Justify your opinion of market value. Your opinion that the tax assessment is too high is probably right. Tax assessors usually base their tax on the cost of replacing your home plus the land's value.

Write all the information down in an organized format to be presented to the tax office. Don't forget to include adjustments for differences between your home's value and a recent local sale due to conditions, location, date of sale, amount of living space, etc.

• Research other properties. Your property should be taxed at about the same rate as comparable homes in your neighborhood. If yours is higher, you are entitled to a reduction. Get information about other tax at the assessor's office. (Your neighbors will never know.) All you need to find is three or four homes very similar to yours that are taxed at a lower value.
• Challenge the opinion of the tax office. Tax are based on the market value of your land and the buildings on that land, in the opinion of the tax office. Yet tax employees rarely have any kind of professional training in this area. Even professionals in the real estate business reach different opinions when valuing property.

• Hire your own appraiser. Tell the appraiser

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  that you need it for a real estate reduction appeal. Shop around and get quotes from several appraisers. The cost is usually small compared with the amount of tax you will save, especially since a reduced tax will stay in effect for several years.
• Look for the lowest value. Use anything you can to explain why your property's value is lower than what the tax employee determined it to be. Put yourself in the place of a buyer who is trying to justify why you should lower the selling price of your home.

• Look at the employees worksheet. Go to the tax-assessment office and ask to see the worksheet that the employee used for valuing your property. You have the right to see this document. Check to see if the person properly describes your home, land, zoning and public services. Check that the numbers of bathrooms and garages are listed correctly.
• Review property descriptions for mechanical errors. Check that the dimensions of the house were measured correctly and that the correct mathematics was used in calculating the number of square feet.
• Look for clerical errors. The amount of the bill on the worksheet should be the same as the amount on your tax bill.
• Check that personal property wasn't included. Personal property is anything that is easily movable and is not fixed to land.

• Calmly present your facts. Go to the assessor's office and tell the assessor what reduction you want and why. They will probably make an adjustment if you have a good case. If the tax office doesn't agree to reduce your tax, ask for a hearing with the local board of review. These boards have been established to give an impartial opinion. If the board decides against you, you can take your case to a court of law.