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Life is about the yin and the yang. Take, for instance, the booming real estate market in the Washington area. For most homeowners, it’s a wonderful gift, boosting the price of their humble abode far beyond anything they ever dreamed.
But within this price appreciation, the seeds of a darker, costly fate are sown. For, as the price of your home rise, so too does the tax assessment on your house.
The average property tax paid nationwide rose 39 percent over the decade ending in 2002, according to the Tax Foundation, a conservative research group.
Of course, this doesn’t sit well with homeowners. But what can you do about it?
Well, quit complaining and start appealing. There’s a chance the tax assessor valued your home incorrectly, and appealing the assessment could save you hundreds of dollars in taxes a year.
Now, don’t expect to win an appeal just because you cannot believe your house has skyrocketed in value. You have to prove that the calculation was in error, that the information on the house was wrong.
Getting a reassessment is sometimes as easy as a conversation. In many jurisdictions, you can simply call the assessor and get your problem solved. They’re not looking to have a costly process. If you have a clear-cut error, they’ll grant you a reduction. But generally, you will have to prove that the tax assessor valued your home incorrectly.
Your tax assessor may value homes based on the estimated cost of replacing the house, the amount you paid for the home, or by comparing local sales figures.
With assessments based on a home’s replacement cost, the details matter. Look for mistakes on the description of your home. Did they say you have three bathrooms when you have two?
When municipalities use your neighborhood as a gauge of home prices, you’ll need to show why your home may not be up to snuff. Did the tax assessor assume that your house is a vinyl-sided house like all of the others in the neighborhood, but it’s actually aluminum and has a leaky roof?
Or maybe your lot, while the same size as your neighbor’s, is on a steep hill, making it less valuable. Other possible factors affecting comparable home values include whether you use gas or oil to heat your home and the type of air conditioning you use, central air versus window units.
You also will need to keep tabs on your neighbors’ home values. After checking information specific to your home, compare your assessment with those of neighbors in similar properties. Even if you don’t find errors in your assessment, you may discover that the whole neighborhood might have been over-assessed.
Once you’ve decided to appeal, you need to keep in mind that the likelihood of successfully appealing your tax assessment and reducing your bill depends on where you live.
In 2002, the Maryland assessment appeals boards reduced assessments in 1,895 of 6,126 cases. More than 2,000 cases were withdrawn, because the property owners reached agreements with the counties or because they changed their minds about the appeals after filing with the board.
Of 59,000 taxpayers assessed in Arlington County last year, only 648 appealed for a review from the assessor’s office, according to the county department of real estate assessment. About 233, or 28 percent, won a reduction.
Most counties and states give property assessment information on their Web sites that homeowners can check and use in appealing a tax assessment. For example, the Maryland State Department of Assessments and Taxation offers links by county that show the square footage of your house and its design type. You can also look up the same basic information for other houses on your street.
To get the local worksheet that shows how many bedrooms or bathrooms the state believes are in your house and other details used in their assessment, a Maryland resident has to request that document, either online, by writing or by calling.
Fairfax County offers much of its worksheet data online, and provides a list of sales in the past year to 18 months in your neighborhood.
If your appeal fails, you still might be eligible for a property-tax exemption depending on your municipality, which range from senior citizen and active-duty military exemptions to one for those who own livestock.
A word of caution for those who protest too much: Assessors can raise a valuation based on new information too, so don’t appeal if you recently put an addition on your house.