How Do You Challenge the State’s Appraisal?
This is a rather different matter. Whenever you own real property, the state (or county) appraises it for tax purposes. These appraisals are typically made when the property is first improved (a home built on it), when it’s sold, and, in some jurisdictions, every so many years thereafter. (In California, under Proposition 13, the state can only reevaluate the property upon new construction and sale.) Rather than using an independent appraiser, often a county employee from the assessor’s office is sent out to determine the value of your home for tax purposes. The method of appraisal is identical to that for a lender’s appraisal. The size, condition, and, most of all, comparables are considered.
Be there, prepared, when the appraiser from the assessor’s office shows up. These people have a lot of property to appraise and they don’t like challenges to their appraisals, which slow down their work. Provide the appraiser with good solid reasons why your property is worth only as much as you think (using comparables to back yourself up). Sometimes, to avoid a challenge later on, the appraiser may be more than willing to consider your arguments.
Once the appraisal has been made, it is filed with the county assessor’s office, and in due time (often several months), you will receive a notice telling you what the county feels your property is worth. The note may also give you a time and place for appealing the amount, although that’s not always the case. (You can, how ever, always appeal, provided you meet the usually very strict time deadlines.)
Some people receive their assessed valuation and are thrilled because it is so low—sometimes only half or a quarter of what they think the property is worth. Don’t be fooled; you’re dealing with politicians. There’s also the “tax rate.” This is the amount of tax you pay on your valuation. Politicians can agree to value property at half or a quarter of its true market value, then raise the tax rate so that you’re paying as much as if the property had been valued at full market price. Most people only look at the valuation and don’t pay attention to the rate.
Find out at what percentage of market value your house has been valued. (Call the assessor’s office.) If it’s half, then double the valuation figure to get how much the appraiser figured your house was worth. You could be unpleasantly surprised! Remember, here we’re concerned about paying taxes—the lower the appraisal, the less the tax bite.
You will be given a time and place to appeal an assessed valuation of your property. Before you appear, go to the county assessor’s office and ask to see their file on your property. (Don’t be surprised to find it’s only a three by five card. If it’s a computer file, get a print out.) Check it carefully.
Be at the appeals hearing on time and be prepared. Don’t argue emotionally; negotiate with facts. Some of the solid reasons that you can use to get an appeals board to change the valuation on your property are the following.
Examples of Reasons for Changing a Valuation
- Wrong Comparables. Bring your own set of comparables with photos and a description of the comparables, including price, signed by someone such as a real estate agent.
- Wrong Description. Assessors make mistakes. Maybe they said your house had four bedrooms when it only has three.
- Wrong Calculations. Did the assessor get the right number of square feet for the house? What about for the lot? Remember, assessors are only human and most are severely overworked. Mistakes of this kind, unfortunately, are more common than people suspect.
- Wrong Exemptions. You may be entitled to a variety of exemptions such as one for homeowners, for religious property, or for something else.
- Wrong Extenuating Factors. Sometimes there will be a detracting feature that will reduce value that the assessor missed. For example, if your property is next to a toxic waste dump, it’s likely to be worth significantly less than a comparable located a mile away. Similarly, your property may have a utility easement running through the front lawn that could lower its value, and the assessor simply overlooked this.