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How can I bring down my property taxes?

February 24, 2012: 6:06 AM ET

I purchased a brand new home in 2008 at a price of $315,000. A few weeks ago I learned that the assessor says I have two bathrooms and central air conditioning. I do not. I pay over $6,700 in taxes, and I feel that's too high for such a small house. What can I do to bring my taxes down? - Name withheld, Maybrook, N.Y.

Your question is timely. Property values have plummeted since the housing bubble burst in 2008. Many homeowners expect that when the fair market value of their houses drop, their property taxes should drop too. But property taxes in different parts of the country have stayed high for a number of reasons, such as property tax assessment limits and reappraisal cycles, says Debbie Asbury, president of the International Association of Assessing Officers.

The good news is that you can definitely file an appeal. It's free, you do not need a lawyer, and the odds are good that you may win. "Only about 5% of homeowners fight to lower their tax bill, and the success rate of those that do fight is about 20 to 40%," says Pete Sepp, executive vice president of the National Taxpayers Union.

Timing is important: Property tax appeals must be filed soon after the most recent tax assessment was mailed out to you—typically 60 days. Deadlines for appeals vary by locality, though in some places if you're trying to point out a simple error to the assessor informally, this can often be done outside of formal appeal windows. "However, if you're going through the formal process of a hearing, those deadlines are usually set in stone," he says.

Unfortunately, you can only file an appeal about the most recent tax assessment figures – nothing from prior years. Assessments are typically done every 3-5 years.

To build your case, start by contacting the local tax assessor's office. Find out the rules in your area and learn about the forms, procedures and other requirements necessary for making an appeal. Tax assessors use different criteria to measure the value of a home for tax purposes. Some use the estimated cost to rebuild, or recent sales of comparable homes in the same neighborhood. Sometimes the tax liability is a fixed percentage of the property's estimated market value.

You should also ask for a copy of the home's "property card"—the description of your home that the assessor has on file. If you find errors—say, the wrong square footage of your home—you may have a strong case. Websites such as propertytaxdatabase.com, and valueappeal.com can also help you find important data, including the actual assessed valuations for comparable homes in your area, but they will ask for a fee of about $100.

For more information about property taxes in the state of New York—and how to contest your assessment—go to the New York State Department of Taxation and Finance's website.

How much time disputing your tax bill will take depends on where you live and the type of complaint you have. "If there's simply an error on your property card, an hour's worth of time with the assessor may be all you need to clear up the matter," says Sepp. "But if it's a more formal appeal based on comparable values of other properties, I generally say that if you can spare a day or so to gather evidence, an evening to attend other peoples hearings, a weekend to prepare your own presentation, and an hour or so to make your own case before an appeals board, you've likely budgeted about the right amount of time."

-- Judy Feldman

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