Here are our tips.
Among the many reasons by which a property owner can file for a property value appeal, is the decline in home values. Last month’s Case-Shiller Price Index reflected a further decrease in the 20-City Composite Index to 17.4 percent YoY. This has affected homeowners whose homes were once valued at higher prices but now have lower real market values (RMV) because of the property downturn. Rising foreclosures hammered home values starting last year and there are still no signs that the market has arrived at the bottom. As an effect, these homeowners will be paying property taxes based on old assessments of their property’s value or in other words, higher assessed values in their tax payment.
There has been an observed growth in property value appeals. Joe Milicia of the Associated Press reports that the number of appeals for the 2007 tax year went up anywhere from 10 percent in Collier County, Florida., to almost 90 percent in Clark County, Nevada. The median sales price in Chicago was down nearly 10 percent in October from a year ago, and property value challenges have more than doubled in Cook County, Illinois, from about 127,000 in 2005 to about 277,000 last year.
Most homeowners’ appeals are granted by the Assessment Appeals Board (AAP) but do not assume that such cases are favored only because the property bust has gone beyond our expectations. The board needs enough evidence to justify the reassessment. This is where some individuals fail to give enough validation to secure lower tax payments after incurring processing costs for the appeal. To have a higher chance of getting the board’s favor, we recommend the following:
Hire an appraiser that is licensed by the state. He or she must be a member of the Appraisal Institute so that the appraisal methodology is in compliance with the Assessment Appeals Manual. You can be sure of the most accurate result without having to worry about the credibility of your evidence.
A reliable assessor won’t only provide good paperwork for documentation. During the hearing, you need to trust him or her when cross-examining the board’s authorized assessor. Your assessor needs to prove that his calculated RMV is a correct value so that you can reduce your taxes. There’s no substitute to technical knowledge that he can provide you with.
Many people decide to join the hundreds of others who are also filing on the last week of the scheduled appeals in their area but remember that the whole process doesn’t take place overnight. Don’t act days before the three-month provision expires so you can save yourself from the burden of long lines. The AAB also schedules the hearings and delays are frequent.
Hiring a lawyer is more expensive but you can have more assurance that the documentation has no risks of failing to substantiate your evidence. If the tax benefits in the long term outweigh the costs of an attorney’s fees, then it’s alright to hire one. However, most homeowners opt to rely on the assessor alone without the services of a lawyer. All that they have to pay are the processing fees, reassessment costs and transportation costs to and from the hearing.
By preparing well, you can pocket a few hundred dollars which you can use for your monthly bills and your children’s education.