My Home Lost 18.6% Of Its Value In 2008
Last year was a pretty bad year for me, financially. First I lost my job and now I’ve come to find out my condo lost approximately 18.6% of its value in 2008. Generally, I completely ignore price fluctuations on my property. After all, it’s not an investment, it’s a place to live. However, there is one time of year its impossible not to pay attention to your home’s value: tax assessment time.
Last week, I received this year’s property tax assessment and sure enough, the assessed value of my home reflects prevailing market conditions in my area. I had a general notion in my mind that my condo had probably lost 10-15% in the recent real estate bust so the 18.6% figure wasn’t all that shocking; however, it still wasn’t pleasant to have my suspicions confirmed.
Make Sure You Get Your Tax Break
One positive aspect of the real estate crash is that since real estate taxes are based on market value, a drop in the value of your home should correspond with a drop in you property taxes. Of course, property tax assessments aren’t meant to accurately reflect your property’s market value down to the penny, but tax assessment trends can give you a broad overview of general price trends in your neighborhood. Altogether, my 2009 property tax will be about $138 lower than in 2008 (due to a combination of value and millage rate changes). Small consolation, but I’ll take it.
Fortunately, my taxing authority lowered my tax appraisal voluntarily so it wasn’t a problem. Some cash-strapped municipalities, on the other hand, may try to slip one past inattentive homeowner and continue to tax area properties at now-far-too-high valuations unsupportable by a realistic market appraisal. If you have the bad fortune of living under one of these dishonest regimes, you’ll have to contest your property tax assessment.
Contesting Your Property Tax Assessment
There are a number of reasons your real estate tax assessment may be wrong but in the end, all you really care about is getting it fixed.
- Act Immediately – You only have a limited amount of time to contest a property tax bill from the time you receive it, so you don’t have any time to spare. The time limit should be listed on your property tax bill.
- Schedule A Review – Your bill will contain steps to contest your appraisal, or at least point in to where you can find that information.
- Gather Market Information - The first step is to gather relevant information about the value of your property. Comparable sales lists of the kind found on zillow.com or homegain.com will come in very handy here.
- Arrive On Time With Your Documentation – Your fate is entirely determined by how well you do in the hearing, so dress nicely and arrive on time. If your tax appraisal is grossly inaccurate, the review should be a shoe-in so long as you have the data to back up your claims.
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Cities cannot lower their property taxes without cutting their budgets, which is difficult because they usually have a 3-year budget in place.
I tried getting my property tax lowered, but my city lowered it just a little so that very few people would complain and they didn’t loose very much tax revenue. It’s very difficult for homeowners and cities.