Fight property tax bill with these tips

Declining house values create great opportunities for homeowners

Declining house values create great opportunities for homeowners to contest their property tax bills and potentially save big money. (Credit: AP Photo)

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Declining house values create great opportunities for homeowners to contest their property tax bills and potentially save big money.

Each jurisdiction has its own rules, procedures and deadlines to appeal property taxes. The bottom line is that a little research, communication and patience can pay off when you fight a property tax bill.

Here are the stories of three homeowners who've fought their property tax assessments:

-- Michael Garard, a real estate broker at Garard and Associates in Highlands Ranch, Colo., has contested the tax assessment on his house three times in the last 10 years with mixed results. He recently scored a big win: a drop in the valuation from $535,000 to $480,000 that will cut his tax bill by about $300 a year for at least two years.

The exercise took about four or five hours, during which Garard researched comparable properties in the brokers' multiple-listing service, drove out to see those properties and attended a hearing at the local Board of Equalization.

"The county gives you a 15-minute conference. You sit down across from the assessor's representative. He presents his facts, you present your facts, and there is a mediator. We came to a meeting of the minds, and 20 days later, we got the notice that said the commissioners have agreed that the new assessed value will be what we agreed on," he says.

He attributed his success to "accurate data," showing the disparity in sale prices between older and newer houses in his neighborhood. The assessor had based the tax valuation on newer houses. Garard argued those weren't comparable.

Some homeowners might find the process tedious, but Gerard says he enjoys the challenge.

"It's fun when you save money," he says.

-- Geoff Hauer, broker/owner of Cherry Point Properties in Denver, Colo., says presenting data was key to his successful property tax challenge. He used the purchase of his own house during the valuation period as a data point to support his case.

"They had valued the home at $530,000. We had purchased the home during that window for $470,000 and made some improvements. I thought the value should be $480,000, and that's where it ended up," he says.

The process started when Hauer received a four-page document from the assessor, outlining the valuation and comparable sales on which it was based. In a flurry of email messages, Hauer put forward his data, an assessor's property inspection and, a few weeks later, a second notice with the lower valuation.

Hauer expects to save $500 to $800 a year; his locality hasn't set the mill levy, or rate, used to calculate the tax. Even if the levy increases, he'll still save compared with what his bill would have been, he says.

"What often happens is that when valuations go down, the mill levy will go up, so their receipts are consistent. If my home was overvalued, I'd get the double whammy of the higher mill levy on that overvaluation," he says.

-- Harvey Kaufman, a homeowner in Woodmere, N.Y., has been fighting his property tax assessment in court since 2008 and has won some battles, though not yet achieved a final victory.

"There is a back-and-forth, back-and-forth, and we won, they won," he says.

At issue is the tax assessor's decision to increase the value of Kaufman's home during a major remodeling project. At the time of the reassessment, Kaufman says, the house had no garage door, windows or bathrooms. He and his family were living with his mother-in-law.

The difference in the valuation amounts to "several hundred thousand dollars," Kaufman says.

A judge's order will allow his case to be heard in court, but Kaufman remains bitter about his tax bill.

"We've paid it. They have my money." he says. "When I heard that we won, I thought, when can I pick up my shopping bag? ... They were very good to take my money, but will I ever see it again?"

Mortgage rates bounced up from last week's record lows, as investors became more confident about the U.S. economy.

The 30-year fixed-rate mortgage rose 7 basis points to 4.25 percent. A basis point is one-hundredth of 1 percentage point.

The 15-year fixed-rate mortgage rose 6 basis points to 3.45 percent. The average rate for 30-year jumbo mortgages, or generally for those of more than $417,000, rose 4 basis points to 4.62 percent.

The 5/1 ARM rose 3 basis points to 3.09 percent. With a 5/1 ARM, the rate is fixed for five years and adjusted annually thereafter.

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