How To Challenge Your Property Tax Assessments

In today's tougher economy, many home owners are challenging their property tax bills in an effort to cut costs any way possible. While not impossible, home owners can succeed in cutting their property taxes if they do their research and follow the required procedures.

Most move up home buyers pay their mortgage, property taxes and home owners insurance in one payment to their mortgage lender. The mortgage lender servicing the loan then pays the property taxes and insurance when these expenses become due. Mortgage servicers do not have any part of challenging excessive bills or finding a better deal for insurance.

Most tax districts establish property values to create what is called the property's assessed value. Towns use appraisers and in most cases send out inspectors to come up with this value. This process is not perfect and in many cases is subjective, so home owners can be successful in arguing that their home is worth less than the town determined.

Property taxes are calculated by multiplying the assessed value of a property by the town's established mill rate. In many cases, towns only tax a certain percent of the assessed value instead of the entire value. The mill rate is set by the town, applies to all properties and cannot be changed.

As the home owner, you have the right to challenge a property tax bill by challenging the town's assessed valuation of your home. The first step is to learn the procedure for your town. Most towns publish an assessment date. For example, in many towns, the value of a property is published on October 1 of each year for property taxes that will be due the following year.

After the assessed value is published, towns then give home owners a short window during which they can file a challenge to their property taxes. Once they file the challenge, home owners will be scheduled for a hearing where they can plead their case.

This hearing is your one chance to show why your home is valued too high. The best argument you may have might be that your value is too high would be any factual errors. For example, the assessor may have marked down that you have three bathrooms when you only have two. Or, the square footage calculation may be off. The second best argument you may have might be that you are paying much more in taxes for your home than other similar homes in your neighborhood. You may have other arguments, but these two are the most common and most effective.

In some areas - such as Westchester County in New York state - home owners have multiple taxing districts. In these areas there is usually one property value assessment and all the local, county and school taxes are calculated off this valuation. In areas with a lot of taxes from numerous locations, the importance of minimizing your assessed property valuation is even more critical.

When home buyers are buying a home, they should pay careful attention to the actual property taxes on the property for the current year and scheduled for the next year. In many cases, home listings show property taxes for the previous year but the scheduled payments for the following year are already set. Home buyers can contact their local property tax assessor's office or in many cases property tax information is on-line.

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