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How to Challenge Your Property Taxes

NEW YORK (MainStreet) -- Home prices continue to slide, which is bad news for any homeowner thinking of selling. But even those who are settled into their houses for the long haul have another potential concern: Property taxes are often based on an outdated assessment that is higher than the true value of your home.

The good news is that you can challenge that assessment if you think the tax assessor is a little too bullish on your home's value. And more often than not, you'll be successful.

Data suggest that those who challenge their property tax assessment have a high rate of success.

A survey just released by found that one in four homeowners have challenged their property tax bills at some point. And in about three out of four of these cases, they've been successful in lowering their bill to the tune of 1% to 4%.

Of course, a property tax bill isn't like a parking ticket -- you can't just show up in court and hope the cop who pulled you over gets stuck in traffic.

"A challenge needs to be presented with a well-researched and well-organized set of facts," explains FindLaw's Stephanie Rahifs, an attorney. "In addition, the formulas for calculating property taxes and the procedures for appeals can vary widely depending on the county and state."

Because of those varying standards and procedures, it's impossible to give a simple guide to challenging your tax bill. But there are some basic guidelines, says Ted Beck, president and CEO of the National Endowment for Financial Education.

"You need to understand on what time period they're basing the assessment; it has a lag to it, so the market could have been stronger then," he says. "If the assessment looks like it's an automatic increase, get the information on the appeals process and follow it to the letter."

While that process will vary, he says the most important thing is being able to present alternate evidence -- namely, a comparable home you believe is more similar to your own than the ones chosen by the assessor. That means searching public listings in your neighborhood and speaking to an area realtor with whom you're familiar. Most will be willing to help you for free in the name of forming a relationship with a potential client, and Beck says there's usually no need to bring in a paid expert to help.

Most importantly, be honest and accurate in picking a home that's truly similar in terms of location, size and age. And be sure to use the selling price rather than the asking price -- in this market, many sellers are settling for less, which works to your advantage here.

Following these steps, Beck says he has successfully challenged two property tax bills.

"The process was pretty fair, and we never felt like anyone was out to over-assess," he says. "We got a letter back saying that they'd agreed with our challenge and that our tax base just dropped."

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