When You Disagree With The Tax Assessor

As federal and state aid to municipalities dwindles, some homeowners had better prepare themselves for a one-two punch from the local tax office. Not only are real estate taxes climbing, but across the nation cities large and small--Atlanta and Reading, Pa., for example--are busy checking up on the current value of each house. The aim is to make sure the tax burden is shared equitably. And while some assessments may drop, plenty of taxpayers will wind up paying a higher tax rate on property with a higher valuation.

Other than grumble, you can do little about a general tax-rate hike. But an astute homeowner can challenge a reassessment--and possibly save hundreds, if not thousands, of dollars a year. "Any evaluation has room for errors," says Kevin Comer, executive vice-president at MMC Inc., an appraisal firm that has done assessments for 200 Northeastern communities.Pointing out mistakes can lower your assessment. Or, you can prove your place was valued unfairly. Dean McQuown, director of professional services at the International Association of Assessing Officers, won a reduction on his Chicago home with this argument: "The house was undervalued in relation to fair-market value--but other homes in the area were undervalued more."

RECORD-CHECKING. Winning an appeal doesn't require a professional's know-how. McQuown's organization offers free brochures, The Property Owner Who Wants to Know and Standards on Assessment Appeals, to help build a case. (Write IAAO, 1313 E. 60th St., Chicago 60637.)

A first step is to check the public property records at the county tax office. The identification number on your tax bill will help you locate your home's assessment-data card or printout. You should check it for obvious errors--incorrect dimensions, for example, or an unfinished basement listed as finished. Such mistakes often are enough to upset the assessor's calculation of the home's worth. "If property is valued at $100 a square foot in your area, and the card says your house is 36 feet across when it's actually 32 feet, the valuation can be way high," says Comer.

No errors? Then compare the valuation on your home to similar ones on your block and adjoining blocks. The assessor tries to determine what your property would fetch if it were sold. One way to establish fair-market value is to check recent sale prices on a half-dozen other homes like yours. Find houses in the neighborhood that match yours in size, age, condition, and construction material. If the assessment office doesn't keep sales records, ask local realtors for figures.

Then, if the other homes' record cards show lower assessments, you may have the basis for a case. Realtors and mortgage lenders put specific dollar amounts on different features that affect a home's value. So you can add or subtract to arrive at your idea of a fair assessment for your home.

Even if nearby houses have assessments roughly the same as yours, you might plead for a lower one. Some sample arguments:

-- Although you spent a lot to build your home, its domed shape or unusual layout limits its resale value.

-- The assessor visited your home early in the assessment process, which normally takes at least two years to complete. Since then, a busy shopping mall opened nearby, reducing the value of the house.

-- You're entitled to special exemptions. In many states, senior citizens, veterans, and others merit reductions in valuation. For instance, South Carolina cuts the figure by up to $20,000 for war widows. Some states allow a credit for historic buildings or for added energy-saving systems.

If you do your homework, the odds of a payoff are good, Chicago real estate tax consultant Gary Whalen writes in Digging for Gold in Your Own Back Yard ($23, R. E. I. Press, 36 S. Washington, Hinsdale, Ill. 60521). He cites reports showing that more than 50% of Cook County (Ill.) taxpayers who appeal their assessments win reductions that cut an average of $300 to $400 off their annual tax bills. Despite the favorable odds, less than 1% of all property owners question their reassessments.

Since even a small savings gets magnified with each passing year, the prospect may merit spending $200 to $500 for an independent appraiser's view of your home's worth. "If you call in someone designated by the American Society of Appraisers or other recognized accreditation group, the evidence will be accepted almost without question by any appeal board," says Richard Hoffman, president of Appraisal Research, a Findlay (Ohio) company hired by local authorities to do communitywide assessments in six Midwestern states.

Some homeowners, Hoffman adds, err by failing to prepare a realistic appeal. Instead, they may ask for a reduction on the grounds that they simply couldn't sell their million-dollar house for that much money in today's market. Such an argument may fall on sympathetic ears in the tax office, but without factual evidence to back it up, it's not likely to get a reduced assessment.

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