According to CBS News, about one-third of U.S. homeowners are paying too much for property taxes. Taxpayers who fall into this bracket have the right to appeal for a review of their tax burden. The tax assessment is based on the assessed value of the home, which is made by an elected official subject to public opinion. So, taxpayers just might win this fight against city hall. However, in order to have the best chance of lowering their tax assessment, homeowners need to present a solid argument, preferably utilizing a professional real estate appraiser.

What is a Tax Appeal?

Local governments sometimes miscalculate the tax owed on a property. The assessment can be based on incorrect information or erroneous assumptions. These include incorrect total square footage or the total bedrooms and bathrooms. It can also include basic errors, such as assigning taxes for the wrong location. Let’s take a closer look at how the process works.

What is the Process for a Tax Appeal?

The first thing the taxpayer must do is learn how the local property tax process works. An appraiser also needs to be very familiar with how the tax value of the property is assigned in order to determine whether it can be challenged.

All tax-assessed properties are listed in a tax roll. Getting a copy of this information provides the details of how the assessed value of a property was derived. This is where the owner or appraiser can check the number of bedrooms, bathrooms, and dimensions and square footage as well as any other details that seem relevant.

Most appeals are based on errors in fact where the data on the tax card (the tax roll information for the property) or an error in judgment. Errors in fact are relatively easy to win since it’s a matter of correcting the information.  If a homeowner plans to argue the tax value is too high based on opinion, they need to present several appraisals of similar properties with lower assessed values. This is where an appraiser can help.

The Appraiser’s Role in a Tax Appeal

The property appraiser can provide a list of property values, using at least three similar properties and several valuation types: current use, comparable sales, replacement cost and the age/life method. This detailed presentation will hold weight during the appeals process.  The homeowner can use the appraiser’s information when they talk to the property tax assessor to try to get a lower assessment.

Liability Issues from an Errors and Omissions Standpoint

If the appraiser is following the standards specific to the city or municipality and acting ethically in terms of evaluating the latest comparable properties, there shouldn’t be an issue with errors and omissions liability. However, tax valuations and market value are often based on different factors, so there’s a risk that the appraiser may not fully understand the tax assessment process.

This could open real estate appraisers up for liability if the owners or municipality challenge their findings. Members of the Appraisal Institute and other appraisers are sworn to act independently and advocate only for their methodology and actuals findings. If appraisers follow a professional course and carefully document their comparisons, the risk of errors and omissions liability is minimal.