It’s every homeowner’s favorite time of year!
Oh yes! It’s tax season my friends.
If you are lucky, like the hubby and I are, then it’s the 3rd year of your last assessment (triennial) and you are up for a re-appraisal of your property.
And if you are extremely lucky, again, like us, then your property value as assessed by the county auditor is expected to go up especially with this hot market.
It’s great that the market has picked up and our house is valued more now that how much we paid for it.
But with increased home equity, it also means a higher tax bill. It’s a bittersweet pill to swallow. Increased equity doesn’t translate to actual dollars until we sell (and we don’t plan to yet), but a higher tax bill is money out our pockets right now!
But never fear, as always I got your back!
Getting a higher assessed value from the county auditor doesn’t mean you are locked into a higher rate. There is a way you can fix it and I’ll share it with you.
I was able to listen to a very timely tax presentation at our local real estate investor meeting by our local county auditor himself Dusty Rhodes and Attorney Christopher Finney. And because I love to share what I learn, I’ve provided the highlights below so you can know how to get your property tax bill reduced. Here is the rundown of the presentation:
Dusty was extremely knowledgeable, understands the taxpayer’s pain and is kinda on our side. He puts his money where his mouth is and has been a champion for clearer taxes and fairness – he even let the government have it in his October newsletter.
It’s comforting to know some of our elected officials actually care about the taxpayer. But I digress, the real good news is that he admitted that the auditors make mistakes, after all, they don’t know your house specifically and haven’t seen inside it etc. He let us know that we shouldn’t be scared to file revisions and even encouraged us to file revisions if there are errors in their evaluation.
Some more good news, the county doesn’t purposely set out to screw us. Crazy right? I still don’t know if I completely believe it 🙂
They don’t pick our house out of the neighborhood and decide to value ours 10% more than our neighbors – even though we might feel like they do. And they don’t raise everyone’s values just so levies can get more money ( I talk more about this in my post on how the county auditor values houses).
They provide for revisions because they know they don’t have all the information and need our help to fix it.
And if you think it’s not worth the energy, think again. For every $10,000 in an increase, it translates to $250 in added taxes each year! Being able to get those savings and not just take the info they give us is great news!
Now for some less good news.
You can file a revision to have your property assessment re-evaluated but the onus is on you to prove what the correct property value should be and not that the county auditor gets it wrong.
The auditor has no obligation to tell you how they evaluated the value of your house, although it is usually based on comparable sales during the cut off date (in our case as of 1/1/2017). Meaning it’s the price they think your house would sell for on 1/1/2017.
Not right now, not at the time of the revision request, but instead at the time of the tax lien (assessment) date.
And finally, this is the kicker.
Requesting a revision isn’t something you do just because you don’t like your tax bill or feel cheated. You are not begging them to change their mind or complaining it isn’t fair.
It’s a process based on facts and the burden of proof is on you.
But its a double-edged sword. If you file a revision because the house was assessed at $100,000 but your evidence shows that the house fair market value (what it would sell for) is $150,000 then guess what? The revision board will raise your assessed value to $150,000 resulting in an increase which is worse! Don’t try to trick a trickster. They have access to the MLS and they can see if you listed your home for $900,000 and then want to tell the board that you think the house is worth $700,000. So don’t waste their time and your own. You don’t want to go before the revision board with a request unless you know you have a case.
Do I have a case to appeal?
The magic question is, do you have a case?
Here’s how you know:
You have a case to make an appeal if the assessed value from the tax bill is greater than the fair market value of your property i.e. what you would sell your property for. The easiest way to find out that value if you didn’t just buy your house is to ask a realtor. If you are internet savvy you can also look for sales in the last year online at sites like Realtor.com and Redfin and get a range for yourself. If the difference between the assessed value and how much you would list your house for is especially large, then you have a case to appeal.
However, if the fair market of the property is far more than how much you paid for it, then yeah for you! Now sit down and keep your mouth shut… I say that with love 🙂
So where do I start?
Google your county auditor’s office you’re likely to see the auditor page in the first few listings. From there you can navigate the website to find how to file with the Board of Revisions (see below) or call the auditor’s phone number to get details on what form to complete and when are the deadlines.
How do I get evidence?
Again, the key here is determining your fair market value. So if your home was recently sold in the last 6 months meaning an arm’s length sale. In this case, it would be relatively automatic that they would adjust your assessed value to that of your recent sale amount. You can provide a copy of your sales contract and HUD-1 statement to show the difference in values.
If you had an appraisal recently (whether for a sale, refinance, or a specifically ordered expert appraisal for this appeal) you can provide those documents.
Getting comparable sale values of properties 6 months before the cutoff date, and 6 months after the cutoff date that are in like condition and size within a mile radius is the best evidence you can provide. But these must be actual sales, not listings.
Determining the cost of a new construction i.e. taking the price of buying the land and building a new house from scratch would be very tricky and likely not help so don’t go there. Comparable sales, appraisals and purchase contracts are easier.
Whew, that was a mouthful. But the bottom line is. You need some evidence beyond – “I feel like my tax bill should be lower, my neighbor has a lower bill, or the county auditor is totally wrong.”
What if I need help?
You can do this on your own, but if you are busy, not sure what to do or just don’t want to do it, there is help. You can have expert witnesses (realtor and/or appraiser) to testify to the value of your property or you can hire an attorney like Christopher Finney from Finey Law Firm who presented with Dusty or almost any other law firm that offers the service.
You can do this!
We obviously can’t cover everything in you can do in this one post, but this is to get you thinking. You don’t have to take what is given and just live with it. If it doesn’t seem right, then investigate, gather your info and do something about it. Bottom line is, you aren’t cheating your county out of taxes or failing to pay your fair share or using some loophole. This is making sure that your home is valued correctly, that you aren’t getting overcharged and taking money from your family.
Things to remember:
- This isn’t about your neighbors, or their house, or what’s fair. Its only about your house and it’s value.
- All your evidence must be targetted towards proving the value as of the cutoff date, not when you get the bill or not what it’s valued at right now.
Oh and some random information: Did you know that dog catches and county auditors are allowed to enter your home without a warranty? But per Dusty, they have never exercised that if the year’s he has been an auditor so if someone poses as an auditor and want to enter your home, you should call the cops… Enjoy