Lower Your Property Taxes Now: Here's How to File a Winning Appeal

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One of the most contentious topics among homeowners is property taxes, so it's pretty likely that it'll come up at one of this summer's backyard barbecues, between bites of burgers and your neighbor's famous potato salad. Yet, for all the complaining, surprisingly few people try to appeal their property tax assessment, even though they could save thousands of dollars.

There are hundreds of law firms and specialized tax appeal companies that will appeal on your behalf, usually for a percentage -- as high as 30% of the savings, which means no cost to you if their efforts are unsuccessful. And homeowners always have the DIY option as well.

Helen Stubbmann, a Realtor with the Corcoran Group in Montauk, NY, appealed her property taxes on her own 15 years ago, on the four-bedroom, half-acre home on Long Island that she and her husband, a contractor, designed and built 28 years ago. She got a modest reduction, and was satisfied.

This year, she did some research and realized that owners of comparable properties were paying considerably lower taxes. So, Stubbmann hired Tax Reduction Services of Greenport, NY. They appealed on her behalf to the Town of East Hampton's Assessor's Office, which denied the claim. So TRS appealed to the Suffolk County Supreme Court, where they presented an appraisal disputing the town's valuation. Based on that evidence, the court determined her assessment was 25% too high, which resulted in a whopping $1,900 off of a bill of $7,800 per year.

New companies use tech to boost your case

Among the firms offering real estate tax reduction are some tech-driven newcomers -- like Chicago's TurboAppeal -- that specialize in "disruptive" algorithms they say can gather information that homeowners need to successfully file an appeal.

"The algorithm takes thousands of different property characteristics into account when substantiating an appeal," says John Guidos, TurboAppeal's chief operating officer, whose company plans to expand to 15 markets in the next two years. "Some of the areas we're specifically targeting are the highest property tax areas in the nation."

Make the strongest argument possible

Whether you use a tech company like TurboAppeal or a traditional property tax firm, or you take the DIY approach, you should consider a few factors before beginning the appeal process:

  1. Look up a description of your property and make sure it's accurate. "[Often,] the assessor thinks they have 2,500 square feet, and they only have 2,000," says Anastasia Poulopoulos, a Chicago tax attorney.
  2. Look at how the county where you live assesses property. What does it consider assessed value to be? Become confident asking: "Is my property worth this much?"
  3. Look at comparable sales in your neighborhood to check if the assessor's number is too high or just high enough. "A ranch and a two-story [house] are not similar," Poulopoulos says. "Your taxes may be high, but they may be fair compared to similar properties."

Assessed valuation is ultimately the key to a winning case, says Paul Henry, president and founder of Tax Reduction Services. Those assessments don't necessarily rise and fall in tandem with property values. And even a lower valuation doesn't necessarily mean you would be paying lower taxes, since various governmental entities in some states can increase tax rates to meet their budgets. (States like California and Florida have property tax caps that limit escalation.)

"We have neighborhoods on Long Island where people are paying 1% of their value, and neighborhoods where they're paying 3%," says Henry. "If you want to protest the percentage, you've got to go to the school board meetings and demand that spending be cut."

Can't you DIY?

Homeowners can appeal their own taxes, and firms are obligated by law to inform potential clients of this. But there's a reason there are experts out there. All that information can be overwhelming. Do you have the time, ability and resources to properly present the case on your own? If the answer is no, do a little research around a company's pricing and their success rate.

That way, rather than complaining about your taxes at the next barbecue, you can just enjoy those burgers and potato salad.