Real estate values fuel property tax fights

Our home is on a hill in suburban Austin. That's one of the main reasons we bought it. While it's a bit of pain for the hubby to mow, our lot offers us some great views, the most notable being undeveloped canyon land on two sides.

We moved into the place in late June 2005 and were thrilled when July 4 rolled around to discover that the wide open views also provide us with multiple fireworks displays from neighboring communities.

So each Independence Day has become an unofficial block party. Last night, as the hubby and I stood out in the middle of our street with neighbors watching five separate simulations of rockets red (and blue and green) glare, talk turned to property values.

Of primary interest to us all was how the asking prices of some for-sale homes might affect the value of our properties. And, of course, just how that might eventually show up in our annual property tax bills.

Property value concerns: We homeowners have always had to reconcile ourselves to conflicting emotions when it comes to the tax assessor's annual valuation of our personal castles. We love the place. We've gone into major debt to live here.

Then along comes this stranger telling us that our beloved abode is worth, in our estimation based on market conditions and our mortgage balance, way too much or way too little.

If we think the home is undervalued, it's a blow to our homeowner's pride. It also could be a cold financial slap. Nobody wants to owe more on a place than, by one accounting, what it's worth. Sadly, though, that's the case for many of today's homeowners.

On the other hand, there's the overvaluation issue. A too-high assessment means we'll have to write an inordinately large check to pay our annual property tax bill.

More and more homeowners in this situation are fighting back, as I noted back in December in Property tax appeals on the rise.

I had lunch a couple of weeks ago with a woman who was a bit late to our meal because she had been protesting an excessive assessment of her home's value. She won that battle.

I'm glad my friend was successful in getting her home's value, and ultimate tax bill, lowered. But she and her neighbors could end up paying another price. Or, as the New York Times notes today, Tax Bill Appeals Take Rising Toll on Governments.

"Homeowners across the country are challenging their property tax bills in droves as the value of their homes drop, threatening local governments with another big drain on their budgets," writes NYT staffer Jack Healy.

Healy goes on to note that, according to the National Association of Counties, 76 percent of large counties said that falling property tax revenue was significantly affecting their budgets. Officials in some states say their property tax revenue is falling for the first time since World War II.

Challenges mean choices: Does that mean we homeowners should gut it up for the overall well being our towns and states? Yeah, right.

But we do need to be aware that every time we or our neighbors are able to shave some dollars off their tax bills, we're going to have to make decisions (or demand our local and state officials make them) about what services we can do with less of or without entirely.

While some places (about 10 percent of large counties, writes Healy) are raising the tax rates associated with home values to minimize the revenue loss, most are simply absorbing the losses. That means laying off workers (at city, county and school district levels), renegotiating labor contracts and outsourced programs, freezing salaries and cutting services.

Now I'm not saying simply accept the assessor's incorrect figure. We all should pay only what's fairly owed.

But I am saying don't be surprised to see some changes, not all of them welcome, in your community because of your successful real estate property value challenge.

Property value protest tips: If you decide to protest your property assessment, the following articles, Web sites and blog posts offer some tips.

• Protesting Your Property Assessment (Bankrate.com)
• Protesting Property Taxes (Robin's Real Estate News)
• Suggestions to protest property tax increases (Yahoo! Answers)
• How to Protest Your Property Taxes and Win (Lifestyles Unlimited)
• Field Guide to Property Tax Appeals (Realtor.org)

Good luck!

Comments

[omaha houses]

With housing prices have declined, so do property assessments. In assessing the real estate market because rising prosperity, it should be lower. And lower assessment means you pay less property tax.

[Poplar Bluff Real Estate]

I am asking if a real estate agent can legally force me to sign informal and misleading documents in order to progress with the purchase? The seller and I have already signed all legal documents as outlined in our legal contract.

[Martha Diaz]

Great comments and tips, thank you. I am looking for assistance/information or an organization to help me appeal my property tax appraisal. We built our own house with on "sales materials" and the house is not even finished, we bough the cheapest land we could find - in a neighborhood with single/double wide trailers and most yards are filled with old junk. The house is also right next to the hwy and drainage pipes- this property is completely undesirable - unless of course you are like us and don't care. Well the appraised valued came in at over 125K over our recent refinance bank appraisal. The initial person refused to change it and then the board dropped just a bit, but still the property is appraising at thousands over the bank appraisal value. No one would pay this amount of money for this house, but the county is making us pay double the amount I believe we should. Any body, any help would be greatly appreciated. Thank you,

[Jack Miller]

We've been working with homeowners in the Austin area to protest their property tax valuations, and have at this point saved several people thousands of dollars. We have a how-to that we wrote, as well as an automated tool to get recent sales data for the Austin area. Hope this helps!

See http://glt.bz/proptax

[Kelly White]

We have had great success helping our customers take care of their concerns regarding their property tax appraisals.

This year alone, our team has saved homeowners @$500,000 in property tax assessments. Another great source of data regarding the property tax hearing process can be found at http://bit.ly/sqrOL